Hannah Gilpin is the controller of Blakemore Auto$$ Glass, a division of Eastern Glass and Window. Blakemore replaces and installs windshields. Her division has been under pressure to improve its divisional operating income.$$ Currently, divisions of Eastern Glass are allocated corporate overhead based on cost of goods sold. Jake Myers$,$ the president of the$$ division, has asked Gilpin to reclassify$$ $$50,000$ of installation$$ labor, which is included in cost of goods$$ sold, as administrative$$ labor, which is not. Doing so will save the division$$ $$20,000$ in allocated corporate overhead. The labor costs in question involve installation labor provided by trainee employees. Myers $$argues$,$ "The trainees are not as efficient as regular$$ employees, so this is unfairly inflating our cost of goods sold. This is really a cost of training$($administrative labor$),$ not part of cost of goods$$ sold." Gilpin does not see a reason for reclassification of the costs other than to avoid overhead allocation costs.

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Part $1$

Requirement $1.$ Describe Gilpin$\text{'}$s ethical dilemma.

The ethical standards related to Gilpin$\text{'}$s ethical dilemma$$ are:

A$.$

$(1)$ Honesty,$(2)$ Fairness, and$(3)$ Integrity. These standards are summarized in the$$ CMA's "Standards of Ethical Conduct for Management$$ Accountants".

B$.$

$(1)$ Competence,$(2)$ Confidentiality, and$(3)$ Fairness. These standards are summarized in the$$ CMA's "Standards of Ethical Conduct for Management$$ Accountants".

C$.$

$(1)$ Honesty,$(2)$ Integrity, and$(3)$ Responsibility. These standards are summarized in the$$ IMA's "Standards of Ethical Conduct for Management$$ Accountants".

D$.$

$(1)$ Competence,$(2)$ Integrity, and$(3)$ Credibility. These standards are summarized in the$$ IMA's "Standards of Ethical Conduct for Management$$ Accountants".