I have a financial and managerial accounting paper due soon. I have the paper written but would like someone to review it and give feedback. It needs to be another page in length and I'm not sure what else to write. Is there anybody that can review my paper and give feedback?

Stacy Cummings, a controller at Merced Home Products, Inc. believed that the standard costs at the Home Security Division were odd. When she checked into this, she found letters from the companys external auditors to top management stating that there was an abnormal usage of standard costs. Upon speaking with Gary Farber, the assistant controller, he already knew what had happened and was alright with the way that it was being handled. He said that Preston Lansing rigged the standards of his division to get the outcome that he wanted. Stacy spoke with the president of Merced Home Products, Inc. and was told that we all know what Lansings doing, but as long as he continues to turn in such good reports, dont bother him. Stacy asked if the board of directors knew what was going on. The president assured her that the board knew what was happening. (Brewer, Peter C., Garrison, Ray H. and Noreen, Eric W.)

Preston Lansing created a patterned quarterly income for each year. He rigged the standards so that a favorable variance was always shown. The company policy was not detailed enough to state when the variances should be reported on the division income statements. The policy did state that variances are taken directly to the income statement as an adjustment to cost of goods sold. This left things open so that Preston could save up the favorable variances and use them to create a pattern of growing profits for the first three quarters. The last quarter, which was before Christmas, always showed a great quarter. This allowed Preston to give a Christmas bonus. (Brewer, Peter C., Garrison, Ray H. and Noreen, Eric W.)

The IMA Code of Ethics clearly states four ethical principles: honesty, fairness, objectivity, and responsibility. Preston Lansing obviously believes that he is not doing anything wrong. The code of ethics says that an accountant needs to be honest with their numbers. The numbers should be represented as they are.

Preston is able to overestimate or underestimate the amount of revenue that shows in a certain period. This prevents budgets from working properly and is unethical because companies can intentionally twist numbers so they can achieve certain goals. (Accounting Ethics)

Standard costing variances help management to make an estimate of the costs that will be required in relation to production. Variances show that actual costs are different than standard costs. Favorable variances show management that actual costs were less than standard costs. This particular case shows that favorable variances tell management that if everything stays the same, actual net profit will exceed net planned profit. Unfavorable variances show that actual costs were greater than standard costs. As a result, unfavorable variances tell management that if everything else stays constant, Merced Home Products, Inc.s net profit will be less than planned. (Standard Costing)

Standard costs developed and used by the Home Security Division are showing to be inconsistent for the four quarters in the year. This is allowing Preston Lansing to inappropriately manage profits during the course of the year. This also shows that the reporting of variances to the accounting department to record in the financial statements are not timely. The accounting manager should be sure they are aware of the quarterly variances to be able to record them in the financial statements. (Standard Costing System)

Standard costs have been set too high in the beginning of the year and too low at the end of the year. Preston Lansing is not communicating variances to the accounting department on a timely basis to record in the financial statement. He saved the favorable variations to create a pattern of growing profits in the first three quarters followed y an extreme fourth quarter. Accounting management should be checking to make sure that the variances for each quarter are being recorded in the financial statements. Management should be reviewing these variances each quarter and looking for ways to improve costs control, cost management and operational efficiency. They should not be ignoring what Preston Lansing is doing. The inventory might be overvalued due to the wrong standards. If there is a lot of inventory at a pretend cost, the cost of goods sold will be lowered on the income statement because of too much favorable variance. (Standard Costing System)

Preston Lansing should not be allowed to continue managing the reported profits because the standard quantity is set too high. Standard costs should be reviewed to make sure they are consistent for the year and they show what is really happening for the year. The management teams should come together each quarter to review the quarterly standard costs, review the whole year and come to an agreement on what is an appropriate. This would be a good habit to get into and would be very beneficial to the company. The financial statements are not reflecting an accurate picture of quarterly profits or losses because the variances are not being recorded properly. (Standardized Period End)

Stacey Cummins did what she should have done. She spoke with the manager, the president and even asked if the board knew what was going on. Its obvious that everybody but Stacy is ok with what Preston is doing. Stacy should go talk to the board herself to ensure that they are aware of what is really going on. If that does not have an effect, she needs to drop the issue to avoid creating anymore conflict in the company or perhaps find a different job. (Ethics Center)