For your initial postread through the following ethical dilemma and explain how shaving $5\%$ off the estimated direct laborhours in the base for the predetermined overhead rate usually results in a big boost in net operating income at the end of the fiscal year. You will also argue in favor of the general manager's request to reduce the direct labor$-$hours in the predetermined overhead rate computation to $420\mathrm{.}000$ direct labor$-$hoursRemember to use logic and the accounting principles that you have learned to develop your argument. Alsoprovide enough information and detail so that your classmates can provide a response Ethical DilemmaTerri Ronsin had recently been transferred to the Home Security Systems Division of National Home ProductsShortly after taking over her new position as divisional controller, she was asked to develop the division's predetermined overhead rate for the upcoming year. The accuracy of the rate is important because it is used throughout the year and any overapplied or underapplied overhead is closed out to Cost of Goods Sold at the end of the yearNational Home Products uses direct labor$-$hours in all of its divisions as the allocation base for manufacturing overhead To compute the predetermined overhead rate, Terri divided her estimate of the total manufacturing overhead for the coming year by the production manager's estimate of the total direct labor$-$hours for the coming yearShe took her computations to the division's general manager for approval but was quite surprised when he suggested a modification in the base. Her conversation with the general manager of the Home Security Systems DivisionHarry Irvingwent like this Ronsin: Here are my calculations for next year's predetermined overhead rate. If you approve, we can enter the rate into the computer on January $1$ and be up and running in the job$-$order costing system right away this year. Irving: Thanks for coming up with the calculations so quickly, and they look just fine. There is$,$ however, one slight modification I would like to see Your estimate of the total direct labor$-$hours for the year is $440,000$ hoursHow about cutting that to about $420,000$ hours? RonsinI don't know if I can do that. The production manager says she will need about $440,000$ direct labor$-$hours to meet the sales projections for the yearBesides, there are going to be over $430,000$ direct labor$-$hours during the current year and sales are projected to be higher next year IrvingTeriknow all of thatI would still like to reduce the direct labor$-$hours in the base to something like $420,000$ hoursYou probably don't