Ethical Issue: The company manufactured high-tech components passes through two production processing departments. The department managers are partially compensated on the basis of units of products completed and transferred out relative to units of products put into production. The head of molding department has three new employees who were not technically skilled. Due to being not technically skilled the units produced in June had minor molding defects. To maintain normal high rate of completion, the quality control inspector was told to pass the product through inspection and pass to the assembly department saying the unit had defects which are non-detectable to the human eye.
To identify: (a) Potential stakeholders involved in the situation and (b) alternative to be taken in the situation and way to prevent the occurring of given situation.
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ACCOUNTING PRINCIPLES
- The company where Daniel works produces skateboards locally but sells them globally for $60 each. Daniel is one of the production managers in a meeting to discuss preliminary results from the year just ended. Here is the information they had in front of them: Standard Quantity per Unit Standard Price Wood 2.50 feet $4.00 per foot Wheels 5.00 wheels $0.50 per wheel Direct labor 0.30 hours $14.00 per hour Actual results: . • Quantity of wood purchased, 225,000 feet; quantity of wood used, 220,000 feet. Quantity of wheels purchased, 418,800 wheels; quantity of wheels used, 400,800 wheels. Actual cost of the wood, $4.20 per foot. Actual cost of the wheels, $0.55 per wheel. • Quantity of DL hours used, 26,400 hours; actual cost of DL hours, $15.20 per hour. Actual units produced, 80,000 skateboards. (a) Complete a variance analysis for DM (both wood and wheels) and DL, determining the price and efficiency variances for each; be sure to specify the amount and sign of each variance. DM- Wood…arrow_forwardNeed help with this financial accounting questionarrow_forwardPlease provide answer this financial accounting questionarrow_forward
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