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It is fall 2XX6 and Marge Atkins, the new management accountant at Norton Company, a manufacturer of baby furniture, is working on the 2XX7 budget
It is fall 2XX6 and Marge Atkins, the new management accountant at Norton Company, a manufacturer of baby furniture, is working on the 2XX7 budget Scott Ford, the northeast sales manager, whose sales team will easily meet its $2,000,000 sales budget this year, has projected sales of $2,200,000 in 2XX7. But in conversations with individual salespeople, Atkins learns that each salesperson is expecting to makes sales of at least 20% more in 2XX7 than in the current year. When Atkins asks Ford about this he says "Well, not meeting projections is so bad for the morale of the sales team..... and you know how the top brass froths at the mouth when we miss our target by even a little bit... so, we give ourselves a little breathing room. "Intrigues, Atkins investigates further and finds that Pete Granger, the production manager, makes similar adjustments, padding estimated costs by about 10% to come up with the budgeted costs. Required: a. As a management accountant, should Marge Atkins take the position that the behaviour described by Scott Ford and Pete Granger is unethical? Explain. Refer to the Standards of Ethical Conduct for Management Accountants. (6 marks) b. When considering that way in which service department costs should be controlled, the management accountant must consider a range of aims. Identify and comment briefly on three such aims
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