ic Discussion Questions position upen campletian af his internship. Greg decides to keep quiet and not lat the controller know of his error. He reasons that it is unikely that the difference between what he prejected versus the actual expenses will be discovered since Abbatt does nat create detailed monthly operating statements erbe your preduet What market you targeting ths produet for? Wht price w your product for? Make proons of your sales in units over each of th Requirements 1. Using the IMA Statement of Ethical Professional Practice as an ethical framework st of all of the Fls needed to make your prod t. Estimate the cost of each pieceo a. What is (arel the ethical issue sl in this situation? b. What are Greg Mchaels' responsibilties as a management accountant? e. What are John Hammend's responsbilities as a management accountamt? d. What are Beth Sparrow's responsiblities as a management accountant? at would to create your product. Examples urance Estimate the cost of each of Now classify al of the nd ar varable For mxed 2. What would be the impact on breakeven sales from failing to include the fixed monthly salaries? Wauld the breakeven using the erroneous dyts be lower or higher than th correct breakeven (ht breakeven calculation raudn !he manthly salanesl? Do you think this error would be likely to influence the decision of whether to pro- the five year rgin of safety units for ea fve years in your projection propoial? . Dscuss the specific steps Greg should take to resove the situation, Refer to the MA de how much you d lke to make i ts you would need to tin each of the upcomin ve years. Calaulate h el in each of the upcarmingyto mest these targel profit Haw realistie is your patentialture? Do yau think you waud be each of the projected fe years How risky is your venture (use the margin help answer this question. Do you think your target profits are achievable? Statement of Ethical Professional Practice in your response. 2 Impact of increases in di ct materials on produdt G of down & REAL LIFE ven Learning Objectivaa 1, 2& dewn i used in a wide variety ofeducts, incuding jackats, bedding an ows creasing For example, in OctobesO rs, the cost of down has a retailer of deth ng and b hina. By October 2012, that ice per pound had risen to a Decision Cases iterna, wili payingbout S1 urd A9-71 CVP analysis by intern with an ethical dlemmaLeaming Objective 2) pound ts of other types and g rs of daown have increased Abbott Work Weat, Inc, supplies uniforms for a varety of businesses Greg Michaelsis a new intern in the Accounting Department at Abbott. To expand sales, the company is considening paying commissions to its sales force. The controller, John Hammond, anks Greg to complete an analysis assuming aules would increase 25% under the proposed sales commission plan. This analysis should include 1) the new breakeven sales igure and 2l the operating profit under the new sales commission plan, The cost onhas increased becauof a fow reasons, Fit Chins is ane of the majar producers familes are moving t farms to urban s thereby reducinsnumber of families who n the world. and fish over geese and s, decreas potential eng ta e from raising geese On the demand side, ity of down jackets from s ing sing. The increasing popular most of the increase in demand Greg does his best to perform the anlysis He is not exacty sure what he is doing but ho does not want to pear ll he does nat understand accounting. After he gets his prelminary analyss finished, he calls his friend, Beth Sparrow, who is an accounting wnalyst at Serubs and Mare, compating uniform supplier He knaws Bath frem a church group and figures he can trust her. He tels her he is working on a new project and asks her if they can meet for dinner later, where he can ak her advice n stand nt is dr ed a pecialized winter sparts appurel far ng and cimbing Now dow teract the increasing costs of the daw North Fuce, and ather garment ma counteract the increasing cost of raising the price of their praducts to At dinner, Greg confesses to Beth that he realy does nat know if he did his analysis correctly. Beth awures him that she has workad on imilar thinga her compuny She nks hm 'f they can go over the analysis together. He readily agrees because this ust the type of help he had hoped to get. He shows her the apreadsheet he has been warking on, the two of them discuss each itens on the analysis. Greg explains his reasoning behind each caculation and his dats assumptions. Beth tells him that his analysis is therough and agrees that he has done it al correctly as far as she can tell. Lands' End? jacket product ine ands End? age? Why not 2 If the cost of down ses, what h to the beleve New canfident in his work, Grag tums in the prapesed sales commission plan wnalysis the following day. report ends with a recommendation that the new sales commisson plan be undertaken, since it will lead to a significant increase in operating income with only a small increase in breakeven sales. John Hammond glances through the report and impressed with the appearance of the report, it looks profess on 1 and complete Since John has a lot of other work tasks, he approves the new sales commission plan without any further analysis or investigation 3. What is the perce ge increase in the st of down per pound byth to 2012at es by a certain percentag will the selling price of a downf nge by that same maintain the same proit margin? E then he booking some payroll entnes the following week, Greg realizes that he made an error in the CVP analysis he did far the sales commission project. He faled to include the monthly salanies of the sales staff in his computations. Greg is in a panic. he tels John Hammond of his mistake. Greg i, afraid he wil not b" offered afull-time ic Discussion Questions position upen campletian af his internship. Greg decides to keep quiet and not lat the controller know of his error. He reasons that it is unikely that the difference between what he prejected versus the actual expenses will be discovered since Abbatt does nat create detailed monthly operating statements erbe your preduet What market you targeting ths produet for? Wht price w your product for? Make proons of your sales in units over each of th Requirements 1. Using the IMA Statement of Ethical Professional Practice as an ethical framework st of all of the Fls needed to make your prod t. Estimate the cost of each pieceo a. What is (arel the ethical issue sl in this situation? b. What are Greg Mchaels' responsibilties as a management accountant? e. What are John Hammend's responsbilities as a management accountamt? d. What are Beth Sparrow's responsiblities as a management accountant? at would to create your product. Examples urance Estimate the cost of each of Now classify al of the nd ar varable For mxed 2. What would be the impact on breakeven sales from failing to include the fixed monthly salaries? Wauld the breakeven using the erroneous dyts be lower or higher than th correct breakeven (ht breakeven calculation raudn !he manthly salanesl? Do you think this error would be likely to influence the decision of whether to pro- the five year rgin of safety units for ea fve years in your projection propoial? . Dscuss the specific steps Greg should take to resove the situation, Refer to the MA de how much you d lke to make i ts you would need to tin each of the upcomin ve years. Calaulate h el in each of the upcarmingyto mest these targel profit Haw realistie is your patentialture? Do yau think you waud be each of the projected fe years How risky is your venture (use the margin help answer this question. Do you think your target profits are achievable? Statement of Ethical Professional Practice in your response. 2 Impact of increases in di ct materials on produdt G of down & REAL LIFE ven Learning Objectivaa 1, 2& dewn i used in a wide variety ofeducts, incuding jackats, bedding an ows creasing For example, in OctobesO rs, the cost of down has a retailer of deth ng and b hina. By October 2012, that ice per pound had risen to a Decision Cases iterna, wili payingbout S1 urd A9-71 CVP analysis by intern with an ethical dlemmaLeaming Objective 2) pound ts of other types and g rs of daown have increased Abbott Work Weat, Inc, supplies uniforms for a varety of businesses Greg Michaelsis a new intern in the Accounting Department at Abbott. To expand sales, the company is considening paying commissions to its sales force. The controller, John Hammond, anks Greg to complete an analysis assuming aules would increase 25% under the proposed sales commission plan. This analysis should include 1) the new breakeven sales igure and 2l the operating profit under the new sales commission plan, The cost onhas increased becauof a fow reasons, Fit Chins is ane of the majar producers familes are moving t farms to urban s thereby reducinsnumber of families who n the world. and fish over geese and s, decreas potential eng ta e from raising geese On the demand side, ity of down jackets from s ing sing. The increasing popular most of the increase in demand Greg does his best to perform the anlysis He is not exacty sure what he is doing but ho does not want to pear ll he does nat understand accounting. After he gets his prelminary analyss finished, he calls his friend, Beth Sparrow, who is an accounting wnalyst at Serubs and Mare, compating uniform supplier He knaws Bath frem a church group and figures he can trust her. He tels her he is working on a new project and asks her if they can meet for dinner later, where he can ak her advice n stand nt is dr ed a pecialized winter sparts appurel far ng and cimbing Now dow teract the increasing costs of the daw North Fuce, and ather garment ma counteract the increasing cost of raising the price of their praducts to At dinner, Greg confesses to Beth that he realy does nat know if he did his analysis correctly. Beth awures him that she has workad on imilar thinga her compuny She nks hm 'f they can go over the analysis together. He readily agrees because this ust the type of help he had hoped to get. He shows her the apreadsheet he has been warking on, the two of them discuss each itens on the analysis. Greg explains his reasoning behind each caculation and his dats assumptions. Beth tells him that his analysis is therough and agrees that he has done it al correctly as far as she can tell. Lands' End? jacket product ine ands End? age? Why not 2 If the cost of down ses, what h to the beleve New canfident in his work, Grag tums in the prapesed sales commission plan wnalysis the following day. report ends with a recommendation that the new sales commisson plan be undertaken, since it will lead to a significant increase in operating income with only a small increase in breakeven sales. John Hammond glances through the report and impressed with the appearance of the report, it looks profess on 1 and complete Since John has a lot of other work tasks, he approves the new sales commission plan without any further analysis or investigation 3. What is the perce ge increase in the st of down per pound byth to 2012at es by a certain percentag will the selling price of a downf nge by that same maintain the same proit margin? E then he booking some payroll entnes the following week, Greg realizes that he made an error in the CVP analysis he did far the sales commission project. He faled to include the monthly salanies of the sales staff in his computations. Greg is in a panic. he tels John Hammond of his mistake. Greg i, afraid he wil not b" offered afull-time