Week 5 DQs Ethical Issue 22-1

Required Readings

1. Chapter 22: The Master Budget and Responsibility Accounting

2. Chapter 23: Flexible Budgets and Standard Costs

Discussions

The Master Budget and Responsibility Accounting. From Chapter 22, Ethical Issue 22-1.

Ethical Issue 22-1

This case centers on the ethics of padding the budget—and whether the motivation for this action (personal gain or operational efficiency) makes a difference. 

1. What is the ethical issue?

1. What are my options?

Dunn’s alternatives include:

2. What are the possible consequences?

3. What should I do? 

Flexible Budgets and Standard Costs. What are the benefits of standard costs and how do businesses set those standards?

2. Efficiency

3. Price Fixing

4. Management