=+3 Jack Hughes, the management accountant, prepares the variance analysis. It is common knowledge in the company that he and Ronald Monroe, the production manager, are not on the best of terms. In a recent executive committee meeting, Ronald Monroe had complained about the lack of usefulness of the accounting reports he receives. To get back at him, Jack Hughes manipulated the actual fixed overhead amount by assigning a greater than normal share of allocated costs to the production area. Also, he decided to depreciate all of the newly acquired production equipment using the double-declining-balance method rather than the straight-line method, contrary to company practice. As a result, there was a sizeable unfavourable fixed overhead spending variance. He boasted to one of his confidants: ‘I am just returning the favour.’ Discuss Jack Hughes’s actions and their ramifications.