Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter P, Problem 7E
Ethics in Business
Consumers and attorney generals in more than 40 states accused a prominent nationwide chain of auto repair shops of misleading customers and selling them unnecessary parts and services, from brake jobs to front-end alignments. Lynn Sharpe Paine reported the situation as follows in ''Managing for Organizational Integrity," Harvard Business Review, Volume 72 Issue 3:
In the face of declining revenues, shrinking market share, and an increasingly competitive market... management attempted to spur performance of its auto centers.... The automotive service advisers were given product-specific sales quotas−sell so many springs, shock absorbers, alignments, or brake jobs per shift−and paid a commission based on sales.... [F]ailure to meet quotas could lead to a transfer or a reduction in work hours. Some employees spoke of the "pressure, pressure, pressure'' to bring in sales. This pressure-cooker atmosphere created conditions under which employees felt that the only way to satisfy" top management was by selling products and services to customers that they didn't really need.
Suppose all automotive repair businesses routinely followed the practice of attempting to sell customers unnecessary" parts and services.
Required:
1. How would this behavior affect customers? How might customers attempt to protect themselves against this behavior?
2. How would this behavior probably affect profits and employment in the automotive service industry?
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Chapter P Solutions
Introduction To Managerial Accounting
Ch. P - How does managerial accounting differ from...Ch. P - Pick any major television network describe some...Ch. P - It you had to decide whether to continue making a...Ch. P - Why do companies prepare budgets?Ch. P - Prob. 5QCh. P - Prob. 6QCh. P - Prob. 7QCh. P - Why do management accountants need to understand...Ch. P - Prob. 9QCh. P - Pick three industries and describe the risks faced...
Ch. P - Pick any large company and explain there ways that...Ch. P - Locate the website of any company that publishes a...Ch. P - Why do companies that implement Lean Production...Ch. P - Why are leadership skills important to managers?Ch. P - Prob. 15QCh. P - If you were a restaurant owner, what internal...Ch. P - Prob. 17QCh. P - Prob. 18QCh. P - Why do companies take a physical count of their...Ch. P - Why do companies use sequential prenumbering for...Ch. P - Planning and Control Many companies use budgets...Ch. P - Controlling Assume that you work for an airline...Ch. P - Prob. 3ECh. P - Ethics and the Manager Richmond. Inc., operates a...Ch. P - Prob. 5ECh. P - Prob. 6ECh. P - Ethics in Business Consumers and attorney generals...Ch. P - Prob. 8ECh. P - Prob. 9ECh. P - Prob. 10ECh. P - Prob. 11ECh. P - Cognitive Bias and Decision Making During World...Ch. P - Ethics and Decision Making Assume that you just...
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