Repy to Post…original post IS in attachment…
By how much would the managers suggest manipulation lower the unit conversion costs? I am not feeling confident in my math with this question, however, giving my best shot, I estimate that the managers suggest manipulation would lower the unit conversion costs by six dollars and ninety cents. I came to this conclusion by dividing the number of units in work (1000) by the percentage complete (.5). Then, I divided the amount of the unit conversion costs (20,700) by the sum of units found previously (500). Thus, the total amount per unit for conversion costs forty-one dollars and forty cents. Doing the exact same equation, but changing the fifty percent to sixty percent, I found that the total amount per unit for conversion costs would seem as though they were thirty-four dollars and fifty cents. Thus, a manipulated and dishonest difference of $6.90. ◦What should the controller do? It is definite in my opinion that the controller should not “bend”the numbers at all. If I were the controller, I would explain to the production manager why I could not do so, but would offer to go forth on finding solutions with him, and even offer to join the meeting with the business owner. ◦Discuss this situation in terms of ethics and cite specific ethical standards for managerial accountants. In 2005, the IMA released a full publication titled Ethics Resources for Accounting and Finance Professionals advocating the highest standards of ethical business practices as it relates to managerial accounting. This was due to the increased awareness of global financial scandals and the awareness of the need for direct ethical guidelines. The suggested governing principles for managerial accountants include, but are not limited to: honesty, objectivity, fairness, and responsibility. In my opinion, executing the manipulation suggested by the production manager directly objects all of those principles; the act is not honest, it has a preference over being objective or neutral, it is not fair to the owner or company to be unaware of actual financial standings, and the act is irresponsible managerial accounting practices. The future of this company could be jeopardized gravely if the controller decides to follow the suggest manipulation. Works Cited Institute of Management Accountants. (2005). Ethics resources for accounting and finance professionals. Miller-Nobles, T. & Mattison, B. & Matsumura, E. (2018). Horngren’s financial & managerial accounting: the financial chapters. 6th ed.