Consider the following scenario between Dave, a printer, and Steve, an assistant in the localuniversity’s athletic department.Steve: Dave, our department needs to have 10,000 posters printed for the basketball team fornext year. Here’s the mock-up, and we’ll need them in a month. How much will you charge?Dave: Well, given the costs I have for ink and paper, I can come in at around $5,000.Steve: Great, here’s what I want you to do. Print me up an invoice for $7,500. That’s our budget.Then, when they pay you, you give me a check for $2,500. I’ll make sure that you get the job.Required:CONCEPTUAL CONNECTION Is Steve’s proposal ethical? What should Dave do?
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Consider the following scenario between Dave, a printer, and Steve, an assistant in the local
university’s athletic department.
Steve: Dave, our department needs to have 10,000 posters printed for the basketball team for
next year. Here’s the mock-up, and we’ll need them in a month. How much will you charge?
Dave: Well, given the costs I have for ink and paper, I can come in at around $5,000.
Steve: Great, here’s what I want you to do. Print me up an invoice for $7,500. That’s our budget.
Then, when they pay you, you give me a check for $2,500. I’ll make sure that you get the job.
Required:
CONCEPTUAL CONNECTION Is Steve’s proposal ethical? What should Dave do?
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