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Cost Accounting Ethics

Famer Frank's produces items from local farm products and distributes them to supermarkets. Over the years, price competition has become increasingly important, so Susan Kramer, the company's controller, is planning to implement a standard cost system for Famer Frank's. She asked her cost accountant, Margaret Chang, to gather cost information on the production of blueberry preserves (Farmer Frank's most popular product). Margaret reported that blueberries cost $.75 per quart, the price she intends to pay her good friend who has been operating a blueberry farm that has been unprofitable for the past few years. Because of an oversupply in the market, the price for blueberries has dropped to $.60 per quart. Margaret is sure that the $.75 price will be enough to pull her friend's farm out of the red and into the black.

Is Margaret's behavior regarding the cost information she provided to Susan unethical? Explain your answer.

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Famer Frank's produces items from local farm products and distributes them to supermarkets. Over the years, price competition has become increasingly important, so Susan Kramer, the company's controller, is planning to implement a standard cost system for Famer Frank's. She asked her cost accountant, Margaret Chang, to gather cost information on the production of blueberry preserves (Farmer Frank's most popular product). Margaret reported that blueberries cost $.75 per quart, the price she intends to pay her good friend who has ...

Solution Summary

Response discusses issues regarding Cost Accounting-ethics

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