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Jason Archer is the CEO of JCPenney (a U.S. retailer). Because Jason's bonus is based on the company's earnings, he has directed the controller to
Jason Archer is the CEO of JCPenney (a U.S. retailer). Because Jason's bonus is based on the company's earnings, he has directed the controller to use FIFO as the inventory costing method. Jason did not tell the controller his real reason for the directive; instead, he stated that he thought FIFO better reflected the actual flow of inventory costs. What are some of the pitfalls of a company basing a managers or CEOs compensation on the companys earnings
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