Premier Printing provides printing services to many different corporate clients. Although Premier bids most jobs, some...

Premier Printing provides printing services to many different corporate clients. Although Premier bids most jobs, some jobs are negotiated on a “cost-plus” basis. Cost-plus means
that the buyer is willing to pay the actual cost plus a return (profit) on these costs. Clara Jones, controller for Premier, has recently returned from a meeting where Premier’s
president stated that he wanted her to find a way to charge more costs to any project that was on a cost-plus basis. The president noted that the company needed more profits to
meet its stated goals this period. By charging more costs to the cost-plus projects and therefore fewer costs to the jobs that were bid, the company should be able to increase its
profit for the current year. Clara knew why her president wanted to take this action. Rumors were that he was looking for a new position and if the company reported a strong profit, the president’s opportunities would be enhanced. Clara also recognized that she could probably increase the cost of certain jobs by changing the basis used to allocate manufacturing overhead.

1)Who are the stakeholders (parties affected) in this situation?

2) What are the ethical issues in this situation? Explain

3) What would you do if you were Clara? Explain

Expert Solution

ekkarill92 answered 2 years ago

LRF Printing provides printing services to many different corporate clients. Although LRF bids most jobs, some...

LRF Printing provides printing services to many different corporate clients. Although LRF bids most jobs, some jobs, particularly new ones, are negotiated on a “cost-plus” basis. Cost-plus means that the buyer is willing to pay the actual cost plus a return (profit) on these costs to LRF. Alice Reiley, controller for LRF, has recently returned from a meeting where LRF's president stated that he wanted her to find a way to charge more costs to any project that was on...

LRF printing provides printing services to many different corporate clients. Al plus basis. most some jobs...

LRF printing provides printing services to many different corporate clients. Al plus basis. most some jobs new ones, are negotiated on a "cost- Cost-plus means that the buyer is willing to pay the actual cost plus a return these costs to LRF Expand Your Critical Thinking 787 Alice Reiley controller for from a meeting where president stated th her to find a way to charge more to project o meet on goals this period. By charging more costs to the...

Question 3 Ted’s Travel Agency provides travel services for walk-in retail clients and for corporate clients....

Question 3 Ted’s Travel Agency provides travel services for walk-in retail clients and for corporate clients. It is the largest privately owned travel agency in the greater Toronto area. Ted Thompson has been the owner since its first day of business. Many clients are walk-ins who live within a fivekilometre radius of the office, and others hear about the agency from friends and will drive from much farther away. The agency also has a large and growing component of business...

Instructions Phillips Brothers Printers (PBP) provides printing services to a wide variety of customers. For most...

Instructions Phillips Brothers Printers (PBP) provides printing services to a wide variety of customers. For most jobs, PBP submits a bid and uses the job cost system to accumulate costs, but bills the bid amount to the customers. They do have several customers who routinely have "out of the ordinary" jobs and PBP bills those on a cost-plus basis, with the customer paying the actual costs plus a predetermined profit percentage on the total cost. Sally Phillips, controller for PBP,...

Ink Spill, a printing company, provides printing services to its customers. Customers normally pay for printing...

Ink Spill, a printing company, provides printing services to its customers. Customers normally pay for printing services in advance. In October 2020, Ink Spill received $20,000 from customers for services to be provided in November 2020. A senior accountant at Ink Spill wants to record the full amount as a liability in the company’s Balance Sheet at the end of October 2020. Required: Should the $20,000 be recorded as a liability in the company’s Balance Sheet at the end of...

Austin Partners provides management consulting services to government and corporate clients. Austin has two support departments...

Austin Partners provides management consulting services to government and corporate clients. Austin has two support departments —administrative services (AS) and information systems (IS)—and two operating departments—government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2013, Austin's cost records indicate the following: SUPPORT OPERATING AS IS GOVT CORP Total Budgeted overhead costs before any interdepartment cost allocations $690,000 $1,800,000 $7,325,000 $12,550,000 $22,365,000 Support work supplied by AS (budgeted head count) --- 20% 52% 28% 100% Support work supplied...

Boston Partners provides management consulting services to government and corporate clients. Boston has two support Departments...

Boston Partners provides management consulting services to government and corporate clients. Boston has two support Departments —administrative services (AS) and information systems (IS)—and two operating departments—government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2013, Boston's cost records indicate the following: SUPPORT OPERATING AS IS GOVT CORP Total Budgeted overhead costs before any interdepartment cost allocations $630,000 $3,000,000 $8,725,000 $12,470,000 $24,825,000 Support work supplied by AS (budgeted head count) 0 20% 48% 32% 100% Support work supplied...

Lawyers frequently supply their services at different prices for different clients based on the clients’ ability...

Lawyers frequently supply their services at different prices for different clients based on the clients’ ability to pay. How does this differential pricing impact exchange efficiency? Be specific.

Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments—administrative...

Phoenix Partners provides management consulting services to government and corporate clients. Phoenix has two support departments—administrative services (AS) and information systems (IS)—and two operating departments—government consulting (GOVT) and corporate consulting (CORP). For the first quarter of 2017, Phoenix’s cost records indicate the following: Allocation of Administrative Services on dollar amount ranking is $150,000 Allocate the support divisions’ costs to the operating divisions using the direct method. Allocate the support divisions’ costs to the operating divisions using the step-down method. Start...

Texas Building Services provides cleaning services for a variety of clients. The company has two producing...

Texas Building Services provides cleaning services for a variety of clients. The company has two producing departments, residential and commercial, and two servicedepartments, personnel and administrative. The company has decided to allocate all service department costs to the producing departments' personnel on the basis of number of employees and administrative on the basis of direct department costs. The budget for 20X2 shows the following: Personnel Administrative Residential Commercial Direct department costs $70,000 $100,000 $240,000 $400,000 Number of employees 3 5...

Question