Maria Peters, an accountant for a consulting firm, has just received the monthly cost reports for the
Question:
Maria Peters, an accountant for a consulting firm, has just received the monthly cost reports for the two jobs she supervises: one for General Dynamics and one for the U.S. government. She immediately called her boss after reading the figures for the General Dynamics job.
"We're going to be way over budget on the General Dynamics contract," she informed her boss. "The job is only about three-fourths complete, but we've spent all the money that we had budgeted for the entire job."
"You had better watch these job costs more carefully in the future," her boss advised. "Meanwhile, charge the rest of the costs needed to complete the General Dynamics job to your U.S. government job. The government won't notice the extra costs. Besides, we get reimbursed for costs on the government job, so we won't lose any money on this problem you have with the General Dynamics contract."
a. What should Maria do?
b. Does it matter that Maria's company is reimbursed for costs on the U.S.
government contract? Explain.
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