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Please answer what is the ethical IMA in this case, where is the allocation, who is the effective and what is your advice, I will

Please answer what is the ethical IMA in this case, where is the allocation, who is the effective and what is your advice, I will attached another folder to answer the same example

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ACCT602 Managerial Accounting for Decision Making Spring 2024 Vignette for Ethics Quiz Qatar Home Products Reem Al-Madani has recently been transferred to the Home security Systems Division of Qatar Home Products. Shortly after taking over her new position as divisional financial management accountant, she was asked to develop the division's predetermined overhead rate for the upcoming year. The accuracy of the rate is important because it is used throughout the year and any overapplied or underapplied overhead is closed out to Cost of Goods Sold at the end of the year. Qatar Home Products uses direct labour-hours in all of its divisions as the allocation base for manufacturing overheads. To compute the predetermined overhead rate, Reem divided her estimate of the total manufacturing for the coming year by the production manager's estimate of the total direct labour hours for the coming ear. She took her computations to the division's general manager for approval but was quite surprised when he suggested a modification in the allocation base. Her conversation with the general manager of he Home security Systems Division, Zaid Al-Bhimani, is as follows: Al-Madani: Here are my calculations for nest year's predetermined overhead rate. If you approve, we can enter the rate into the system on January 1 and be up and running in the job-order costing system right away this year. Al-Bhimani: Thanks for coming up with the calculations so quickly, and they look just fine. There is, however, one slight modification I would like to see. Your estimate of the total direct labour hours for the year is 440,000 hours. How about cutting that to about 420,000 hours? Al-Madani: I don't know if I can do that. The production manager say she will need about 440,000 direct labour hours to meet the sales projections for the year. Besides, there are going to be over 430,000 direct labour hours during the current year and sales are projected to be higher next year. Al-Bhimani: Reem, I know all of that. I would still like to reduce the direct labour hours in the base to something like 420,000 hours. You probably don't know that I had an agreement with your predecessor, as a divisional management accountant, to shave 5% or so off the estimated direct labour hours every year. That way, we kept a reserve that usually resulted in a big boost to net operating income at the end of the fiscal year in December. We called it our end-of-year bonus. Corporate headquarters always seemed as pleased as punch that we could pull off such a miracle at the end of the year. This system has worked well for many years, an I don't want to change it now

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