Would you please explain to me one by one, please? Question 1, 2, and 3. Thank y

Question

Would you please explain to me one by one, please?

Question 1, 2, and 3.

Thank you so much for your hard work and help ! :-)

MINI-CASE Ethics; Equivalent units of production Cincinnati Beverages Inc. has three plants that make and bottle cola, lemon-lime, and miscellaneous flavored beverages, respectively. The ravw materials, labor costs, and automated technology are comparable among the three plants. Top management has initiated an incentive compensa- tion plan whereby the workers and managers of the plant with the lowest unit cost per bottle will receive a year-end bonus. The results, approved by the plant manager and reported by the plant controllers at each loca- tion, were as follows: Item LO2 Norwood Hartwell St. Bernard $325,000 250,000 $200,000 $450,000 170,000 375,000

Explanation / Answer

1. The unit cost for St.Bernard is lower since there is no ending work in progress reported for that location whereas the other two locations have ending work in progress. Not reporting of ending work in progress inventory lowers the unit cost. As there is no ending WIP, the equivalent units are higher compared to the other two plants which has affected the total cost per unit.

2. As per the IMA Cose of Professional Ethics every memeber must display professional credibility and see that the information is communicated in a fair manner. Any information that is relevant and has a possibility of influencing users decision must be communicated. The member should not engage in any activity that would discredit the profession.

3. If the plant manager insists that the unit cost computation remains as is, the plant controller should:

1. Refrain from any activities that are unethical and follow the code of conduct

2. Not engage in any activity that would discredit the profession.

3. Promote a ethical culture in the organisation and prioritze professional interests over personal interests.

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