Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Cost Accounting for Contract Types Review this case carefully and answer the questions at the end of the case in detail. Jumbo Corporation had numerous

Cost Accounting for Contract Types

Review this case carefully and answer the questions at the end of the case in detail.

Jumbo Corporation had numerous Government contracts. The contractor's accounting system released the contracts to the shop by General Order (GO). There is no identification on the GO as to contract type. In this case, GO-1 is a fixed price contract. GO-2 is a cost type contract. Under Jumbo's system, Frank the shop foreman had the responsibility to tell shop employees which GO to charge their time. After awhile, Frank observed that when his employees charged more time to GO-2, and less to GO-1, he had much less complaints from management at monthly performance reviews. He notices the pattern, and it pleased him. He knew that some fixed price contract costs were being charged to cost type contracts. That made more profit for Jumbo. As V.P. Controller, Harold certified and submitted all invoices to the Government for payment. This pattern went on for some time.

Questions.

1. Is this fraud? Why or why not?

2. Is Frank guilty of Fraud? Why or why not?

3. Is Harold guilty of fraud? Why or why not?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Essential Criminal Law

Authors: Matthew R Lippman

1st Edition

1452276935, 9781452276939

More Books

Students also viewed these Law questions