ightspace XA nit: 3:15:00 ementary Test 2 - Requires Respondus LockDown Browser + Webcam Time Left:3:12:37 Anju Kumari Ray, Attempt 1 e 1: Question 5 (20 points) 2 3 Vanya Hargreeves is the management accountant of Auto Glass's Brisbane Division, which replaces broken windscreens. The Division has been under pressure, lately, to improve its operating income. Currently, all divisions are allocated corporate overheads, based on the cost of direct labour. John Smith, the Division 4 CEO, has asked Hangreeves to reclassify $150,000 of the installation labour, as administrative labour, which it clearly is not; however, doing so will save the Division $50,000 in allocated corporate overheads. The labour costs in question are in relation to installation labour provided by apprentices. Smith argues that as apprentices are not as efficient as regular employees, using them would unfairly inflate the Division's direct- labour costs. He further argues that the costs associated with using apprentices is really a training cost (administrative labour), rather than a part of direct labour costs. However, Hargreeves remains unconvinced by these arguments, believing that the only reason Smith wants the costs reclassified is to avoid overhead allocation costs. Required a. Using your own words, describe Hargreeves's ethical dilemma. ($ marks) b. From a management accountant's perspective, what ethical principles are at risk, and why? (10 marks) C. What steps could Hargreeves take if Smith gives her a direct order to reclassify the costs? In your answer consider all possibilities including any they may be ethically bo to take. (5 marks) [Total for Question 5: 20 m. Click Here for Formula Sheet (PDF) Paragraph B I UA E. Ev / 8 + v