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Please help me answer these questions. Thanks. C...




Please help me answer these questions. Thanks. Curtis Rich, the cost accountant for high power mower company recently installed activity based costing at High power St Louis Lawn tractor where three models : 8 hp blade runner, 12 hp quick cut, and 18 hp super cut are manufactured. Curtis's new product costs for these three models show that the companies traditional costing system had been significantly under-costing the 18 hp super cut. This was due primarily to the lower sales volume of the super cut compared to blade runner and quick cut. Before completing his analysis and reporting the results to management, Curtis is approached by his friend Ed Gray, who is the production manager for the 18 hp super cut model. Ed has heard from one of Marcus's staff about the new product cost and is upset and worried for his job because new cost show the super cut to be loosing rather than making money. At first, Ed condemns the new cost system where upon Curtis explains the practice of activity based costing and why it is more accurate than the companies present system. Even more worried now, Ed begs Curtis, "Massage the figures just enough to save the line from being discontinued. You do not want me to loose my job, do you? Anyway, no body will know". Curtis holds firm but agrees to recompute all his calculations for accuracy before submitting his cost to management. a) Who are the stakeholders in this situation? b) What, if any, are the ethical considerations in this situation? ( Curtis's ethical consideration ? Ed's ethical consideration ? Management's ethical consideration ? c) What are Curtis's ethical obligations to the company ? and to his friend ?


Paper#6063 | Written in 18-Jul-2015

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