1. Tinikits, Inc. is the manufacturer of miniature models, especially of automobiles with

historical interest. The company is developing new standard costs. Trent Roswell

suggests that the new standards for materials should not include any waste for liquid

plastics that spill out of the molds. "After all," he says, "We're trying to be a world class

company. When we build in waste, we tell the workers it's okay to waste some." Mary

Farrell, another manager, disagrees. "If we don't allow for some normal human error,"

she says, "we'll have a mighty unhappy workforce. Also, I think that these kinds of

perfection standards exploit the workers. I certainly wouldn't want to be held up to

perfection every day what could I do but fail?"

The argument continued. Finally, the standards were prepared. All standards were

prepared according to normal expected performance, except that for materials, an ideal

standard was used. Mary, still maintaining the unfairness of the system, refused to hold

her workers accountable for materials quantity variances.

Required:

a. Are ideal standards unethical? Explain briefly.

b. Is it unethical for Mary to refuse to support the standards? Explain.