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1 . 2 7 Prafessional ethics and reporting division performance. Hannah Gilpin is the controller of Biakemore Auto Glass, a division of Eestern Glass and
Prafessional ethics and reporting division performance. Hannah Gilpin is the controller of Biakemore Auto Glass, a division of Eestern Glass and Window. Blakemore replaces and installs windshields. Her division has been under pressure to improve its divisional operating income. Currently, divisions of Eastern Glass are allocated corporate owerhead based on cost of goods sold, Jake Myers, the president of the division, has asked Gilpin to reclassity $ of installation labor, which is included in cost of goods sold, as administrative labor, which is net. Doing so will save the division $ in allocated corporate overhead. The labor costs in question irvolve installation labor provided by trainee employes. Myers argues, "the trainees are not as elficignt as regular employees so this is unfairly inflating our cost of goods soid. This is really a cost of training ladministrative labor not part of cost of goods soid." Gilpin does not see a reason for reclassitication of the costs, other than to avoid overhead allocation costs.
Destribe Gilpin's ethical dilemma.
What should Gilpin do if Myers gives her a direct order to reclassify the costs?
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