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Linda, the cost accountant for Multiverse Air conditioners Sdn. Bhd (MA), recently installed activity-based costing at MA's Shah Alam Air Conditioner plant where two models-
Linda, the cost accountant for Multiverse Air conditioners Sdn. Bhd (MA), recently installed activity-based costing at MA's Shah Alam Air Conditioner plant where two models- Sejuku, and Bekuku are manufactured. Linda's new product costs for these two models show that the company's traditional costing system had been significantly undercosting the Bekuku model. This was primarily due to the lower sales volume of the Bekuku model compared to Sejuku model. Before completing her analysis and reporting these results to management, Linda is approached by her friend, Tina, who is the production manager for the Bekuku model. Tina has heard from one of Linda's staff about the new product costs and is upset and worried for her job because the new costs show the Bekuku model to be losing, rather than making, money. At first, Tina condemns the new cost system, where upon Linda explains the practice of activity-based costing and why it is more accurate than the company's present system. Even more worried now, Tony begs Linda, "Massage the figures just enough to save the line from being discontinued. You don't want me to lose my job, do you? Anyway, nobody will know." Linda holds firm but agrees to recompute all her calculations for accuracy before submitting her costs to management. Instructions (a) Assist Linda to identify the stakeholders in this situation? (b) Demonstrate, if any, the ethical consideration in this situation? (c) Propose Linda's ethical obligations to the company? To her friend
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