In: Accounting
INSTRUCTIONS
Please read the following case study and then answer the three
questions at the end. Copy/paste the questions followed by your
answers into the Discussion Board. Remember to reply to one other
person’s initial post with a minimum of four sentences.
Module 4 Chapter 4 Ethics Discussion
The discussion board assignment is Case 4 - 34 found at the end of
chapter problems in your eTextbook. Your initial post should answer
the two questions (a-b) posed at the end of the case and your
second post should be a response to the post of another
student.
Case 4 -34 Ethics and cost classification
Healthful Foods, Inc., a manufacturer of breakfast cereals and
snack bars, has experienced several years of steady growth in
sales, profits, and dividends while maintaining a relatively low
level of debt. The board of directors has adopted a long-term
strategy of maximizing the value of the shareholder’s investment.
To achieve this goal, the board established the following five-year
financial objectives:
For the past three years, the company has attained these financial objectives. At the beginning of the last year, the president of Healthful Foods, Inc. Andrea Donis, added a fifth objective: maintaining the cost of goods sold at a maximum of 70% of sales. The company attained the new goal last year.
Results for the current year have been disappointing. Increased emphasis on healthful eating has driven up the cost of raw ingredients significantly. Because of a prolonged recession, the company has been unable to pass those increases on to the customer in the form of price increases.
John Winslow, the cost accountant at Healthful Foods, Inc. has
just completed a review of the year’s operating results, which
suggest the cost of goods sold objective will not be met this year.
Because employee bonuses are tied to performance on all five
objectives, Winslow is concerned about company morale. After
additional scrutiny, he decides that is he overestimates the amount
of ending work in process inventory and reclassifies the fruit
and
grain inspection costs as administrative rather than manufacturing
overhead costs, cost of goods sold for the year will fall below the
70% maximum level. Winslow makes the adjustments and presents Donis
with a set of financial statements that meets the company’s five
financial objectives.
QUESTIONS
As above mentioned, to reach the expected objectives of company, it should make to pay additional attention on their human resources who are playing a significant role to attain a stated objectives.
Thus, the company has to concentrate to pay beneifts to the employees to boost and attractive them towards the objectives. The benefits that you mentioned above such as monetary and non monetary which satisfy the employees. Those benefits are as follows,
Monetary benefits means which are related to money matters and non monetary benefits are which related to which do not related to direct money matters.
Monetary benefits | non monetary benefits |
Salaries | praise |
Bonus payment | promotions |
Giving discounts to employees | job security |
Increments of salaries | training and development oppoutunities |
Giving share in profits | flexibility |
Incentives | vocation |
Insurance | job enrichment |
Medical reimbursement | job rotation |
Job enlargement |