You are the Cookie division controller for Tasty Bites Baked Goods Company. Tasty Bites recently introduced a new chocolate chip cookie brand called Lots of Chips, which has more than twice as many chips as any other brand on the market. The brand has quickly become a huge market success, largely because of the number of chips in each cookie. As a result of the brand's success, the product manager who launched the Lots of Chips brand has been promoted to division vice president. A new product manager, Jada, has been brought in to replace the promoted manager.

At Tasty Bites', product managers are evaluated on both the sales and profit margin of the products they manage. During her first week on the job, Jada notices that the Lots of Chips cookie uses a lot of chips, which increases the cost of the cookie. To improve the product's profitability, Jada plans to reduce the amount of chips per cookie by 10%. She believes that a 10% reduction in chips will not adversely affect sales, but will reduce cost and, hence, help her improve the profit margin. Jada is focused on profit margins, because she knows that if he is able to increase the profitability of the Lots of Chips brand, she will be in line for a big promotion.

To confirm this plan, Jada has enlisted you to help evaluate it. After reviewing the cost of production reports segmented by cookie brand, you notice that there has been a continual drop in the materials costs for the Lots of Chips brand since its launch. On further investigation, you discover that chip costs have declined because the previous product manager continually reduced the number of chips in each cookie. Both you and Jada report to the division vice president, who was the original product manager for the Lots of Chips brand who was responsible for reducing the chip count in prior periods.

REQUIREMENT 1:

Is this an ethical strategy for Jada to pursue? What are the potential implications of this strategy?

REQUIREMENT 2:

What options might you, as the controller, consider taking in response to Jada's plan?

KEEP IN MIND THE FOLLOWING:

• Post your INITIAL RESPONSE to the prompt early in the assignment period so that others have time to respond to you.
• RESPOND constructively to at least 2 other students.
• Review the grading rubric to determine how your assignment will be graded.