CVP AnalysisEthical Issues Mark Ting desperately wants his proposed new product, DNA-diamond, to be accepted by top
Question:
CVP Analysis—Ethical Issues Mark Ting desperately wants his proposed new product, DNA-diamond, to be accepted by top management. DNA-diamond is a piece of jewelry that contains the DNA of a boy or girl friend, spouse, or other loved one. Top management will not approve this product in view of its high break-even point. Mark knows that if he can reduce the fixed costs in his proposal, then the break- even point will be reduced to a level that top management finds acceptable. Working with a friend in the company’s finance department, Mark finds ways to credibly misstate the estimated fixed costs of producing DNA-diamonds below those that any objective person would estimate. Mark knows that if the product is successful (and he is certain that it will be), then top management will not find out about the understatement of fixed costs.
Required Are Mark’s actions ethical? Explain.
Step by Step Answer:
Fundamentals Of Cost Accounting
ISBN: 9780073018379
1st Edition
Authors: Michael W Maher, William N. Lanen, Madhav V. Rajan