Introduction to Job Costing, Activity Based Costing

Unit 2: Introduction to Job Costing, Activity Based Costing, Process Costing and Customer Profitability Analysis. - Discussion 1

Instructions:

After you have read the articles above, please post a substantive response to the questions after reading the scenario.

Scenario:

Kim Cidvak is a consultant for one of the largest public accounting firms. He has been called in to review compliance documentation regarding human rights violations at Nogle Manufacturing Conglomerate’s contracted overseas manufacturing operations in China. The contracted manufacturing operation has workers using equipment that must be handled carefully by trained personnel and in the U.S. requires the expensive safety equipment to be worn at all times. Reading the existing report from the Human Resources executive sent there to prepare it, Kim notices there is no report concerning safety compliance just simply training hours, and hours worked on shift.

Questions:

• What are the risks and who are the affected stakeholders? What actions would you take as Kim in this situation and why?
• What ethical responsibilities do Kim and the accounting firms have versus Nogle Manufacturing Conglomerate and the contracted manufacturer? What are the considerations in terms of the financial implications versus the ethical ones and for whom do these apply? Explain your reasoning.

Unit 2: Introduction to Job Costing, Activity Based Costing, Process Costing and Customer Profitability Analysis. - Discussion 2

Topics

Risk and Ethical Responsibility

Risk and Ethical Responsibility

Using the same articles and scenario as in Discussion 1, address the Discussion 2 topic below.

Minnie Lee is an engineer with a multi-national aerospace company that produces fuel-line components for all types of air and space craft. Minnie discovered a potential defect in a particular fuel-line component. Minnie is the lead-engineer for this particular division and scheduled tests that would indicate the failure potential for the component. The tests indicated a very low risk that at certain very low, or very high temperatures, the component might fail, which in turn might lead to a catastrophic failure of the entire system.

· What ethical responsibilities do Minnie and the companies have? For example, should the decision to repair the system be considered in terms of the potential liability risks of failure versus the costs of the repairs?