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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
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 $ of installation labor, which is included in cost of goods sold, as administrative labor, which is not. Doing so will save the division $ 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 trainingadministrative 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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Requirement Describe Gilpins ethical dilemma.
The ethical standards related to Gilpins ethical dilemma are:
A
Honesty, Fairness, and Integrity. These standards are summarized in the CMA's "Standards of Ethical Conduct for Management Accountants".
B
Competence, Confidentiality, and Fairness. These standards are summarized in the CMA's "Standards of Ethical Conduct for Management Accountants".
C
Honesty, Integrity, and Responsibility. These standards are summarized in the IMA's "Standards of Ethical Conduct for Management Accountants".
D
Competence, Integrity, and Credibility. These standards are summarized in the IMA's "Standards of Ethical Conduct for Management Accountants".
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