Question
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
Solutions
ekkarill92 answered 2 years agoRelated Solutions
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
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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,...
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...
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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...
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