Ace Fertilizer Ima

thaumaturge Fertilizer alliance Abby Conroy was tasked with calculating an effective citation for Breeland Ltd. , she chose the bodily function ground accounting m wiztary valueing frame since it more(prenominal) immaculately captures the related cost. A peculiar(prenominal) rules of order was plated by Breeland Ltd. with whiz Fertilizer Company. The did non curriculum to order more of this intersection point in the future. Based on adepts policy, the special order take ond organisation cost for any use upd solids in the core no other orders existed for the sassy materials at the time the Breeland adjure was signed.Abby the right bureau calculated the total direct material and labor cost and accurately arrived at the indirect cost apply the alphabet mode and used cost military action pools that make sense for the come with and proceeds. She falsely included the organization-sustaining cost which ar non related to any specific reaping so should non be included. Abby in mendly calculated the mark up cost by dividing 80% from the cost quite a than multiplying so the markup and the total cost to Breeland has been overdraw by $193,500.This would ultimately say a higher profit with lower costs and a higher customer boundary pains but would be inconsistent with blast 80% markup policy. Revisions could be made and an accurate iterate could be provided to tom Brennen for approval. During in-person time over the weekend, George was presented with a realiz competent opportunity to sell the unused parting of Breelands special order materials to his brother tease. On Monday, George wanted to leave the Breeland quote as is, whereas Abby wanted to edict it to exclude the barter of materials to razz plus additional charges.George is illuminate to leave the quote unchanged, since there are no bleak orders for the additional XO-1600 up to now even though he and tantalise discussed it during personal time. Company policy d ictates that the special order customer would be charge for unused materials in the absence of some other existing order for the same materials. It would be putting the cart forward the dollar bill to recalculate new costs and set forth Breeland of a accomplishable price change before pull the leg of confirms, peculiarly since the training exchange occurred over the weekend during a personal family event.It is plausibly that pull the leg of allow purchase the additional 10 gallons of product but that cant be confirmed until later in the week. It is not correct merely that Breeland should incur those material costs if rag does purchase them. George is not correct in how he would bring off the transaction with Breeland should Josh purchase the materials. The materials should not be fork-like billed and governing body fees should not be incurred by Breeland if this event never occurs.From an IME standpoint, Abbys costing calculations were blemish which declaims to her competency as a commission comptroller, but her integrity was consistent with IMA honest standards. Her markup mistake was most likely a clerical one only that could soft be fixed however including organization-sustaining costs in the guest quote is a larger concept level mistake. The initiative error places a small dark mark against her level of competency. Since she has developed an s swallow level of expertise with Ace, I would show that it could be unmarked.The second error however is larger and would suggest her level of competence might be questioned. Following Georges discourse with Josh, Abby was keen on modifying the gaming to include a materials simplification of $16,000, elimination of the $10,000 presidency fee for unused materials and a dec pass in organization sustaining overhead costs of $52,000. Including the 80% markup, this would save Breeland $93,600 if Abbys certain quote had been correct and the poesy were not modified to re act the organization- sustaining error.It is clear that work oning the archetype quote to accommodate a new client would benefit Breeland, however the parley between George and Josh was personal and not final, even though Josh was able to preliminarily confirm he would place the order. The pilot program quote would consist a more timely quote since future prospects had not yet materialized and would be consistent with Aces company policy. Since Georges conversation with Josh would be considered confidential in genius with respect to Breeland, it would limit Abbys authority to communicate them of any workable retread of the quote without express consent or approval of George.Since tom Brennen would need to refresh any reworked quotes anyway, it doesnt seem likely that Abby would violate any confidentiality requirements as tell by IMA Standards. Georges suggested game plan of accusation the products twice could be seen as a misuse of confidential data since he is confident Josh will steal t he materials but is still willing to move forward with the Breeland quote without disclosing the gap of Joshs purchase to Tom.George may alike be engaging in a conflict of interest by using his brother and information gained in a non traffical environment as a means to un honestly increase revenue. It would in like manner represent a departure from moral philosophy and integrity as an activity that discredits the profession since it wishings communication with Breeland. If Josh does confirm he will purchase the materials within the 20 day usable product window, it would represent additional and more timely information and should signal Abbys recommendation to revise Breelands quote, even if it is after the particular. It is a timing leave.If George does provide the Breeland quote to Tom as is and does not discuss with him the implications of his likely new client on the amount provided, he would be weakening his hold credibility since it would represent a lack of informat ion disclosure to Tom. It could be argued that he is providing the quote fairly and objectively but, it lacks the sixth sense of how the new client would change the numbers in Breelands favor and precludes the possibility of client double billing, an important fact to support disclosure of all pertinent information communicated fairly and objectively.I think Abby is correct in advising George that a accomplishable rework of the quote is in order although found on the confirmed information, the current Breeland bid should go forward as is with a caveat that it could change with the confirmation of Josh as a new client if he is engaged before the Breeland quote is signed. Since the meeting will take place between George and Tom on Wednesday and the expand of Joshs possible purchase are anticipate to become known later in the week, it makes sense to wait a day or two before making the decision.It is also possible that Josh may not make the purchase. Ace is one of the few compani es nationally that is able to produce the product, it seemly unlikely that Ace would risk losing their business by communicate for a few extra years to confirm final details of the quote. No mention of Joshs possible order is necessary. Tom should be inclined full disclosure by George of the move on profitability of both scenarios. These would include 1). the order as is without the prospect of Josh placing an order, 2). he revised order base on Abbys recommendations of reducing XO-1600 materials cost, government activity cost and markup, and the additional sale of the remain 10 gallons of XO-1600 to Josh, including shipping charges and 3). Two dismantle quotes that would include the original quote to Breeland penalize as is, then a contract signed later with Josh followed up with a revised contract with Breeland eliminating the administration cost and the additional materials cost. The quote o Josh should not include organization-sustaining costs since they are not conside red product costs. Abby recommends that George inform Tom about the prospective use of the extra 10 gallons. If George is unwilling to do so, she should also be willing to speak directly with Tom about the Breeland quote changes, if applicable. It is not known what Aces policy is regarding resolving fall outs with questionable ethical implications. If necessary, Abby may contact an IMA Ethics direction to gain a better understanding of how she should proceed.The case study suggests this issue is a matter of how a management comptroller might proceed in light of a shortfall of required periodic profit goal, in that is may be perceived as a way to make up the shortage. It is also mentioned that uncomplete profit scenario would provide the desired military issue of r to each oneing the monthly goal. The management accountant should see this as an ethical issue and not a function of whether one scenario or the other will produce the desired result.If Abby were to revise her orig inal assumptions and excluded the organization-sustaining costs per required by the ABC method she is using, she would have noted a reduction in the bottomland line of $18,000, which represents the governance fee plus an 80% markup. Clearly, the scenario George likes would unclutter the larger bottom line at $802,800, an increase of $28,800 in the bottom line of the Breeland Ltd order alone. This could be a electric potential lapse in judgment based on a desire to go through closer to a proposed profit goal if he doesnt discuss the possible purchase by Josh with Tom.From a policy standpoint however, George is doing the correct thing, although from a fairness standpoint, Joshs possible order must be considered. triplet scenarios are included which outline how each quote will affect the bottom line. If the original quote is signed by Breeland and moves forward without a purchase by Josh, the bottom line will be increased by $774,000. If Josh is stipulation time to confirm and e xecute an order with Ace for the 10 gallons of material anterior to the Breeland quote signing, Ace bottom line will be reduced by $18,000.If Breeland signs the quote, then later Josh signs a contract for the remaining materials and the materials are double billed, the company bottom line would be increased by $802,800. This is ultimately an issue with areas that need insight from IME ethical standards, especially with respect to communicating information to Tom Brennen. It seems a case in which company policy might be overlooked in order to maintain a standard of fairness while also being honest about product and customer treatment.