Read case 5-68 5-69 5-70 and the IMA statement of ethical professional practice

1. Conduct the analysis necessary to evaluate any ethical issues that may be occuring

2. explain why products coats are changing even though there have been no significant changes to the actual costs of the company.

3a what would u do if u were erin jackson? Why?

B whag should erin tell alan tyler why

C should wein jackson report the encounter with alan tyler to anyone? If so to whom and why if not why not ?

*Ima statement of ethics continued

. Case 5-67 Activity-Based Costing: Budgeted Operating Margin (LO 5-1g 5-2 54g 55 57E) Whitestone Company produces two subassemblies, JR-14 and RM.13, uned in manufactoring tracks. The company is currently using an absorption costing system that applies overhead based on direct labor boun The bodget for the curent year ending December 31, 20x1, is as follows Budgeted Statement of Gross Margin for 20x JR-14 RM-13 Total Sales in units Sales revenue Cost of goods manufactured and sold 5,000 5.000 10.000 S1.700,000 2200,000 $3900000 Beginning finished-goods inventory 240,000S 300,000 $ 540,000 1,000,000 1,750,000 2,750,000 185,185 92,593 277,778 Applied manufacturing overhead544.025 272013 816035 Coat of goods available for sale $1.969 210 $2,414,606 $4,383 816 Less: Ending finisbed-goods inventory 240,000 300,000 540000 $1,729 21052 114.606 53.543.816 S (29.210)S 85,394 5 56,184 Add: Direct material Direct labor Cost of goods sold Grous margi Machining 424528 Material handling 56.604 Imspection 7925 S 816088 Total Mark Ward, Whitestone's president, has been reading about a product-costing method called activity-baxed costing Ward convinced that activity-based couting will cast a neir lght on future profits As a resalt, Brian WaerWhestone's director of cost management, has accumalated cost pool information for thus year shomm on the foloning chart This information is based on product mix of 5,000 units of IR-14 and 5,000 units of RM-13 Cost Pool Information for 20x1 Activity Direct labor Direct-labor bours 10,0005,000 Machining Machine hours 15,000 30,000 Assembly Assembly hours Material handling Number of parts510 Inspection Inspection bours 5,000 7.500 6,000 5,500 In addition, the following information is projected for the nexz calendar year, 202 JR-14 RM-13 Beginning inventory. inisbed gooda (in unt) Ending inventory, finished goods (in unita) Sales (in units 600 700 5,1004,900 S00 On Jamuary 1,202, Whicestione is planning to increase the prices of TR-14 to $355 and RM-13 to $455. Macenial costs are not espected to increase in 20s2 bur direct labor will increase by & pescens, and all mafastoring oveshead cos will incresse by 6