Directions Read the case below and answer the three questions in the discussion forum. Explore all possibilities and consider what you are learning and how to apply it. Feel free to play devil's advocate if you wish. APA citations must be used for your outside research. Ethics; Equivalent units of production Cincinnati Beverages Inc. has three plants that make and bottle cola, lemon-lime, and miscellaneous flavored beverages, respectively. The raw materials, labor costs, and automated technology are comparable among the three plants. Top management has initiated an incentive compensation plan whereby the workers and managers of the plant with the lowest unit cost per bottle will receive a year-end bonus. The results, approved by the plant manager and reported by the plant controllers at each location, were as follows: Item Norwood Hartwell St. Bernard Materials $ 200,000 $ 450,000 $ 325,000 Labor 170.000 375,000 250.000 Overhead. 340,000 750,000 500,000 Total $ 710,000 $1,575,000 $1,075,000 Equivalent units of production: Completed 3,500,000 6,200,000 6,450,000 Ending work in process 100,000 400,000 (50% complete) (25% complete) Equivalent units 3,550,000 6,300,000 6,450,000 Unit Cost.. $0.20 $0.25 $ 0.167 Required: 1. When provided copies of the results as a justification for distributing the bonus to the St. Bernard employees, the plant controllers at Norwood and Hartwell accused St. Bernard of manipulating the inventory figures. Reviewing the above schedule, what do you think is the nature of the accusation and how would such action affect the unit cost computation? 2. Is there anything in the Institute of Management Accountants (IMA) Code of Professional Ethics that the St. Bernard plant controller should be aware of in this situation? 3. Assume that the St. Bernard plant controller revises the unit cost to more accurately reflect reality. What should she do if the plant manager insists that the unit cost computation remain as it? Reference VanDerbeck, E. J., (2013). Principles of cost accounting (16th ed.). Mason, OH: South-Western Directions Read the case below and answer the three questions in the discussion forum. Explore all possibilities and consider what you are learning and how to apply it. Feel free to play devil's advocate if you wish. APA citations must be used for your outside research. Ethics; Equivalent units of production Cincinnati Beverages Inc. has three plants that make and bottle cola, lemon-lime, and miscellaneous flavored beverages, respectively. The raw materials, labor costs, and automated technology are comparable among the three plants. Top management has initiated an incentive compensation plan whereby the workers and managers of the plant with the lowest unit cost per bottle will receive a year-end bonus. The results, approved by the plant manager and reported by the plant controllers at each location, were as follows: Item Norwood Hartwell St. Bernard Materials $ 200,000 $ 450,000 $ 325,000 Labor 170.000 375,000 250.000 Overhead. 340,000 750,000 500,000 Total $ 710,000 $1,575,000 $1,075,000 Equivalent units of production: Completed 3,500,000 6,200,000 6,450,000 Ending work in process 100,000 400,000 (50% complete) (25% complete) Equivalent units 3,550,000 6,300,000 6,450,000 Unit Cost.. $0.20 $0.25 $ 0.167 Required: 1. When provided copies of the results as a justification for distributing the bonus to the St. Bernard employees, the plant controllers at Norwood and Hartwell accused St. Bernard of manipulating the inventory figures. Reviewing the above schedule, what do you think is the nature of the accusation and how would such action affect the unit cost computation? 2. Is there anything in the Institute of Management Accountants (IMA) Code of Professional Ethics that the St. Bernard plant controller should be aware of in this situation? 3. Assume that the St. Bernard plant controller revises the unit cost to more accurately reflect reality. What should she do if the plant manager insists that the unit cost computation remain as it? Reference VanDerbeck, E. J., (2013). Principles of cost accounting (16th ed.). Mason, OH: South-Western
