H. Jeckel Manufacturing Company allows employeees to purchase manufacturing materials (such as metal and lumber) at...
H. Jeckel Manufacturing Company allows employeees to purchase manufacturing materials (such as metal and lumber) at cost for personal use. To do so, an employee must complete a materials requisition form, which must then be approved by the employee's immediate supervisor. Fred Rubble, an assistant cost accountant, charges the employee an amount based on H. Jeckel's net purchase cost.
Fred Rubble is in the process of replacing a deck on his home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Fred reviewed all the purchase invoices for the past year. He then used the lowest price to compute the amount due the company for the lumber.
Discuss whether Fred behaved in an ethical manner.
Homework Answers
Fred Rubble used to charge the employees an amount based on H. Jeckel's net purchase cost, for the material requested by company. This can be termed as the ideal practice being followed at H. Jeckel Manufacturing Company. When Fred requested lumber for himself, he should have raised charge for this transaction as per the ideal practice i.e. at net purchase cost but Fred did something else. He reviewed all the purchase invoices for the past year. He then used the lowest price to compute the amount due the company for the lumber.
Fred did not behave in ethical manner as he did not follow the ideal practice which is being followed for similar transactions. Net purchase cost could have been higher for the lumber requested by Fred. In this way H. Jeckel Manufacturing Company's profit is hurt. The lumber which is requested by Fred may have higher net purchase cost as compared to the price selected by Fred (lowest of last 1 year).
Fred's behaviour is not ethical. Whether the charge is for him or for other employees Fred should use ideal practice being followed in the company. His behaviour should not be biased for any one.
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Jeckel Manufacturing Company allows
employeees to purchase manufacturing materials (such as
metal and lumber) at...
A manufacturing company allows employees to purchase, at cost, manufacturing materials such as metal and lumber,...
A manufacturing company allows employees to purchase, at cost, manufacturing materials such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form which then must be approved by the employee's immediate supervisor. The assistant cost accountant then charges the employee an amount based on the manufacturing company's net purchase cost. An employee, who happens to be the assistant cost accountant, is in the process of replacing a deck on...
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materials, factory labor costs incurred, and manufacturing overhead
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overhead to production; and (3) completion of jobs and sale of
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Post the entries to Work in Process Inventory.
Reconcile the balance in Work in Process Inventory with the costs
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Prepare a cost of goods manufactured schedule for June.
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