Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Joan Paxton, VP of marketing for Supertone Recording Equipment, has developed a marketing plan for presentation to the company's president. The plan calls for television

Joan Paxton, VP of marketing for Supertone Recording Equipment, has developed a marketing plan for presentation to the company's president. The plan calls for television ads, something the company has never used. As part of her presentation, she will indicate the impact of the TV ads on company profit as follows: Incremental sales from increased exposure $9,058,000 Less: Incremental cost of goods sold $3,623,200 Cost of TV ads 2,524,000 6,147,200 Incremental profit $2,910,800 While Joan is quite confident in the cost of the ads and the incremental cost of goods sold if sales are $9,058,000, she is quite uncertain about the sales increase. In fact, she believes that her estimate is on the high side. However, she also believes that if she puts in a more conservative estimate, such as $7,093,000, the president will not go along with the TV ads even though they still will generate substantial profits at $7,093,000 of incremental sales. Is it unethical of Joan to bias her estimate of incremental sales on the high side, given that she believes the ultimate outcome is in the best interest of the company

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Managerial Accounting

Authors: Peter C. Brewer

Custom Edition

0077842987, 978-0077842987

More Books

Students also viewed these Accounting questions