Harry Haney, manager of the Eastern Division of MertockCo., made the following comment to the manager of theCentral Division: It’s all well and good for you to say that I should dis-regard sunk costs when I consider whether to replace the old, inefficient equipment with new, more efficientequipment. But my performance evaluation is based onnet operating profits divided by total assets. The newequipment will increase my total asset base and lowerthe ratio of profits to assets, hurting my performance.Thus, I will not sell the old equipment.Do you agree with Haney’s statement? Why or why not? Show
You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant’s report on your desk, and complains, "We owe these consultants $1 million for this report, and I am not sure their analysis makes sense. Before we spend the $25 million on the new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in thousands of dollars) for the project: Project year 1 2 … 9 10 Sales revenue 30,000 30,000 30,000 30,000 - Cost of goods sold 18,000 18,000 18,000 18,000 =Gross profit 12,000 12,000 12,000 12,000 - Gen, sales and admin expenses 2,000 2,000 2,000 2,000 - Depreciation 2,500 2,500 2,500 2,500 =Net operating income 7,500 7,500 7,500 7,500 - Income tax 2,625 2,625 2,625 2,625 =Net Income… You are a manager at Percolated Fiber, which is considering expanding its operations in synthetic fiber manufacturing. Your boss comes into your office, drops a consultant's report on your desk, and complains, "We owe these consultants $ 1.1 million for this report, and I am not sure their analysis makes sense. Before we spend the $ 29 million on new equipment needed for this project, look it over and give me your opinion." You open the report and find the following estimates (in millions of dollars): Project Year Earnings Forecast ($ million) 1 2 . . . 9 10 Sales revenue 28.00028.000 28.00028.000 28.00028.000 28.00028.000 minus−Cost of goods sold 16.80016.800 16.80016.800 16.80016.800 16.80016.800 equals=Gross profit 11.20011.200 11.20011.200 11.20011.200 11.20011.200 minus−Selling, general, and administrative expenses 2.3202.320 2.3202.320 2.3202.320 2.3202.320… What are the four 4 standards of ethical conduct of a management accountant?Four standards of ethical conduct in management accountants' professional activities were developed by the Institute of Management Accountants. The four standards are competence, confidentiality, integrity, and credibility.
What are the ethical responsibilities of management accountants?Finally, the IESBA Handbook contains five fundamental ethical principles with which all professional accountants are expected to comply, including those employed in business. The principles are integrity, objectivity, professional competence and due care, confidentiality, and professional behavior.
Which of the following are ethical standards for management accountants I competence II objectivity III confidentiality IV integrity?Answer: Option a. All of these are ethical standards. According to IMA, ethical standards include: Confidentiality.
What is the IMA Statement of Ethical Professional Practice?IMA's overarching ethical principles include: Honesty, Fairness, Objectivity, and Responsibility. Members shall act in accordance with these principles and shall encourage others within their organizations to adhere to them.
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Using the code of ethics for management accountants, recommend the approach that emily should take
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