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Topic: Jay Farrar Company is a manufacturing company that specializes in writing instruments. The past year was a difficult one for the company, as it
Topic: Jay Farrar Company is a manufacturing company that specializes in writing instruments. The past year was a difficult one for the company, as it sought to retain its share in a market in which the largest competitors were also rapid innovators. Jay Farrar introduced a new product late in the year, even though testing was not complete. It was a pen designed with two cartridges: one supplying ink and the other correction fluid. A person could then switch easily between writing and correcting errors. It was priced fairly high, and was never heavily advertised. Even so, the Correct-O-Pen, as the product was named, was an overwhelming success. The success of the product has Josh Ritter, the manager of the New Products division, worried, however. He was concerned that quality problems would begin occurring, since the longevity of the pen and stability of the correction fluid formulation had not been tested. He did not want sales personnel to get the bonuses that appeared to be indicated, since they might aggressively promote a product that would fail in use. He preferred to complete testing of the pen first, so that more confidence could be placed in the results. Top management, however, declined the tests. Mr. Ritter then instructed you, the accountant, not to prorate payroll taxes or rent expense for the rest of the year, but to show them as current expenses in total. In this way, the new product would appear to be only slightly profitable. To receive full credit, answer both: Describe the alternatives that you as an accountant would have in this situation. Indicate which alternative is best. Value: 100 points Grading: Review the Online Discussions grading policies in the START HERE section How to Participate: . Click on the Click to Launch link at the top of this page . Click the Create Thread link Respond to someone else's post by clicking Reply Note: You must create an original thread in order to view other students' threads in the forum. You cannot delete or edit your own post and you cannot post anonymously. Although I will only read and grade posts made up to the due date, you may continue the conversation on your own
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