Stylish Chairs Stylish Chairs is a small company which makes and sells copies of an 18th-century rococo chair. The company is owned by the couple Anni-Frid and Benny. You are an intern working at Stylish Chairs. For the sake of simplicity, this assignment does not consider taxes and other fees and there is no stock or work in process in the beginning or end of every year. You might have to use information from previous questions for answering information for following questions and whenever possible support your arguments with your calculations. Question 1 Anni-Frid and Benny decided they need a management accountant for helping them understand their business and hire an old friend named Björn for this role. Besides being an old friend of the couple, Björn is good at playing the guitar. However, Björn lacks the qualifications for fulfilling the role of a management accountant. Required Please state one of the ethical standards, as provided by the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice', which is being jeopardized by Anni-Frid and Benny hiring Björn and justify why this standard is being jeopardized. (There might be more than one ethical standard being jeopardized but only one is required for this question). Question 2 First Björn is examining the activities for the past year. Stylish Chairs rents a small administrative office in Melbourne's central business district (CBD) for $20,000 per year and a large warehouse in Dandenong for $30,000 per year. The cost with staff in the administrative office in the CBD handling all the bureaucracy is $100,000 per year. Stylish Chairs has hired a firm for managing the sales and this firm charges a commission of $70 for each completed sale. The invoicing system used by Stylish Chairs is outsourced and for each sale completed the firm charges $1. The administrative office had in the past year other miscellaneous costs of $4,000, mostly costs with the lease of material and stationery, and this yearly cost is expected to remain the same amount for years to come. A full-time employee gets paid $80,000 per year for supervising the casual staff working in the warehouse in Dandenong. Like the administrative office, the warehouse had other miscellaneous costs of $5,000 in the past year and is expected to remain the same amount for years to come. Stylish Chairs has a contract with a delivery firm for delivering the copies of the 18th-century rococo chair to their clients, but Björn is not able to find the contract and is not sure how much the firm charges per transaction. The only information he can gather is regarding past year's quarterly costs: Table 1- Quarterly delivery costs Quarter Delivery Cost Units Delivered $360 First 125 Second $400 150 Third $340 125 Quarter $300 100 Total $1,400 500 1 This is the additional reading for this unit. Below is a table listing all the material used during the past year to manufacture 500 copies of 18th century rococo chairs and the costs incurred. There was no stock or work in process in the beginning or end of the year. Table 2- Material costs Quantity 1,500 m² Material Total Cost Fabric $3,000 $36,000 $150 Timber 6,000 Units Foam 500 Kilograms $450 $10,000 $500 Button stud 4,500 Units Varnish 500 Litres Bolt 5,000 Units The manufacturing activity is made by casual staff. The first stage is the woodworking, where a carpenter is hired by $35 per hour for working with the timber. This task is very labour intensive and for preparing the material a carpenter takes 5 hours per chair. Once the timber is ready for being assembled a casual staff is paid $25 per hour for assembling the chair with the bolts and adding the paddings (fabric, foam, and button studs). The assembling takes only 1 hour per chair. The final stage of manufacturing is varnishing the chair. A casual staff is paid $35 per hour for varnishing the chairs and this task takes 2 hours. Required a) Björn is having some trouble crunching the numbers and has asked for your help identifying and classifying all the costs between (a) fixed, mixed, or variable, (b) direct or indirect, and (c) product cost or period cost. b) Use the high-low method for estimating the cost function for annual delivery costs.