Review each of the following independent scenarios.

Scenario 1: A salesperson was able to secure a special order that would increase his commission for this period. He is concerned that production will not be able to fill the order as he promised to the new potential customer. The salesperson gives two special game tickets to the production manager so that the production manager will expedite the special order (prioritize it over other orders already scheduled for production).

Scenario 2: Even though Protective Company knows that some of the fixed costs could be eliminated, the division manager listed the costs as unavoidable so that the jobs and division will not be eliminated.

Scenario 3: Uneven Company is facing variability production problems and a lot of time in production. The official company policy is to inspect the products at the 20% completion mark and sell the defective times to a discount store. However, since many of the products would fail inspection, the manager has decided to delay inspection until the 50% mark, which would delay having to reject the defective products until the next period. He is convinced that with the extra time, he can identify the production problem and the company will not lose money or consider buying the product from an outside supplier.

Scenario 4: The CEO has a special request from an potential overseas customer whom he met while on vacation. The CEO asks the division manager to sell to the potential customer at a 20% negative contribution margin in the hope that he can foster the relationship. Since there are no avoidable fixed costs, company policy is to require a positive contribution margin on special orders.

a. For each scenario, indicate whether the IMA Statement of Ethical Professional Practice Standards have been violated.

b. Discuss what course of action you would recommend for various personnel in the company. Assume that each situation is independent.