6. Suppose that, after reviewing the results, the controller tells the cost accountant to change the percentage of computer time so 20 percent is shown as used by the Member Department and 30 percent is shown as used by the Commercial Department. Would this be ethical? YES or NO

7. Suppose the controller tells the cost accountant to use employee wages instead of number of employees to allocate accounting department cost. Employees in the Commercial Department earn lower salaries. Based on the above assumption, choose the correct statement(s) from below (Select all that apply):

Check All That Apply

a. If it is done simply to shift cost to the one department, it seems to be unethical.

b. If it is done simply to shift cost to the one department, it doesn't seem to be unethical.

c. If the accounting staff has more paperwork because of the higher wages, then this request is unethical.

d. If the accounting staff has more paperwork because of the higher wages, then this request is not unethical.

10. Suppose the controller tells the cost accountant to use each month the method that allocates the highest cost to the Member Department. Would this be ethical? YES or NO

Required information Problem 11-64 (Static) Allocate Service Department Costs: Ethical Issues ( LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Required information Problem 11-64 (Static) Allocate Service Department Costs: Ethical Issues ( LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Problem 11-64 (Static) Part f Suppose the controller tells the cost accountant to use each month the method that allocates the highest cost to the Member Department. Would this be ethical? Yes or No Required information Problem 11-64 (Static) Allocate Service Department Costs: Ethical Issues ( LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Problem 11-64 (Static) Part a Required: a. Suppose FSP allocated service department costs using the direct method. What is the amount of service department costs that will be allocated to each of the production departments? (Do not round intermediate calculations.) Required information Problem 11-64 (Static) Allocate Service Department Costs: Ethical Issues ( LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Problem 11-64 (Static) Part d d. Although FSP's policy is to allocate service department costs using the direct method, the controller asks the cost accountant to allocate the costs using the step method, allocating Computer Service Department costs first. What is the amount of service department costs that will be allocated to each of the production departments? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) Required information Problem 11-64 (Static) Allocate Service Department Costs: Ethical Issues ( LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: Problem 11-64 (Static) Part e e. The controller next asks the cost accountant to allocate the costs using the reciprocal method. What is the amount of service department costs that will be allocated to each of the production departments? (Do not round intermediate calculations. Negative amounts should be indicated by a minus sign.) Required information Problem 11-64 (Static) Allocate Service Department Costs: Ethical Issues ( LO 11-2, 3, 4) [The following information applies to the questions displayed below.] Fifth Street Publishing (FSP) was founded many years ago as a printing cooperative offering printing services to members. Most members were charitable and religious organizations. Ten years ago, FSP became a for-profit corporation, although it retained its commitment to the original member groups. It has two production departments, Member and Commercial. The Member Department handles printing jobs for nonprofit groups and Commercial serves the remaining customers. FSP is organized this way to facilitate its billing: FSP charges nonprofit customers a price equal to the full cost of the job, including allocated overhead; commercial jobs are priced based on what the market will bear. FSP has two service departments, Accounting and Computer Services (CS). Accounting costs are allocated based on number of employees, and CS costs are allocated based on computer time (hours). Selected percentage use data follow: oblem 11-64 (Static) Part c Suppose the controller tells the cost accountant to use employee wages instead of number of employees to allocate accounting de oly): Check All That Apply If it is done simply to shift cost to the one department, it seems to be unethical. If it is done simply to shift cost to the one department, it doesn't seem to be unethical. If the accounting staff has more paperwork because of the higher wages, then this request is unethical. If the accounting staff has more paperwork because of the higher wages, then this request is not unethical