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In: Accounting

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

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ekkarill92 answered 2 years ago
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