Westfield owns and provides management services for several shopping centers . After five years with the company , James Heller was recently promoted to the position of manager of one of Westfield's b. Suggest L04 MA15-31. Ethical Problem Uncovered by Cost Estimation smaller malls on the outskirts of a downtown area. When he accepted the assignment, James was told that he would hold the position for only a couple of years because that mall would likely be tor down to make way for a new sports stadium. James was also told that if he did well in this assignment, he would be in line for heading one of the company's new 200-store operations that were currently in the planning stage. While reviewing the mall's financial records for the past few years, James observed that last year's oil consumption was up by 8%, even though the number of heating degree days was down by 4%. Somewhat curious, James uncovered the following information: maintained. The mall is heated by forced-air oil heat. The furnace is five years old and has been well . Aug Business Publishers Module 15 Cost Behavior, Activity Analysis, and Cost Estimation . Fuel oil is kept in four 5,000-gallon underground oil tanks. The oil tanks were installed 25 years ago. Replacing the tanks would cost $80,000. If pollution was found, cleanup costs could go as high as $2,000,000, depending on how much oil had leaked into the ground and how far it had spread. Replacing the tanks would add more congestion to the mall's parking situation. Required What should James do? Explain. Westfield owns and provides management services for several shopping centers . After five years with the company , James Heller was recently promoted to the position of manager of one of Westfield's b. Suggest L04 MA15-31. Ethical Problem Uncovered by Cost Estimation smaller malls on the outskirts of a downtown area. When he accepted the assignment, James was told that he would hold the position for only a couple of years because that mall would likely be tor down to make way for a new sports stadium. James was also told that if he did well in this assignment, he would be in line for heading one of the company's new 200-store operations that were currently in the planning stage. While reviewing the mall's financial records for the past few years, James observed that last year's oil consumption was up by 8%, even though the number of heating degree days was down by 4%. Somewhat curious, James uncovered the following information: maintained. The mall is heated by forced-air oil heat. The furnace is five years old and has been well . Aug Business Publishers Module 15 Cost Behavior, Activity Analysis, and Cost Estimation . Fuel oil is kept in four 5,000-gallon underground oil tanks. The oil tanks were installed 25 years ago. Replacing the tanks would cost $80,000. If pollution was found, cleanup costs could go as high as $2,000,000, depending on how much oil had leaked into the ground and how far it had spread. Replacing the tanks would add more congestion to the mall's parking situation. Required What should James do? Explain
