You have recently been promoted as the manager of the camera division of a large corporation. Your

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You have recently been promoted as the manager of the camera division of a large corporation. Your most profitable product is an instant camera that takes pictures and then develops them immediately. Historically; the pictures taken by the camera were of a poor quality, but due to large investments in research and new breakthroughs in technology, the instantly developed pictures are of increasingly higher quality. You have just received your segment financial statements for the period which report the following:

On the basis of this performance you are due to receive a $\$ 3,000,000$ bonus. The top executives of the company are ecstatic about your performance because you have increased quality, reduced defects, and dramatically increased the productivity of your segment. However, having studied management accounting, you know that the manufacturing costs are not the only ones that add value to your products. In fact, in your heart, you believe that were it not for research and development costs, aggressive marketing, and good customer service subsequent to sales, your segment would not be nearly so profitable. Yet, these costs are tracked in other departments and are not your responsibility.

As a manager who is benefiting from traditional performance evaluation methods, you wonder whether you should inform management that it is actually giving you a bonus that is too high. Apparently, you are the only one in your company that is aware that these other value-adding costs should be included in your performance evaluation. What should you do? Do you let well enough alone, or should you go to management and let them know that you are probably being overpaid?

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Related Book For  book-img-for-question

Survey Of Accounting

ISBN: 9780538846172

1st Edition

Authors: James D. Stice, W. Steve Albrecht, Earl Kay Stice, K. Fred Skousen

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