Question
Your company has just adopted a just-in-time philosophy, allowing it to combine all parts of an order and it is sold as soon as it
Your company has just adopted a just-in-time philosophy, allowing it to combine all parts of an order and it is sold as soon as it is completed. You notice two of the plants estimate their ending Work-in-Process inventories at 80%. This allows the plant managers to meet their profit goals and receive a bonus. The managers feel calculating the percent complete takes judgement and they will finish the Work-in-Process inventory first thing next year.
Evaluate the managers reasoning and explain the effects this could have on the current and future years financial statements. Include any ethical issues created by the managers. Identify the options your company has, and what consequences does this create for the company.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started