Chuck Moore supervises two consulting jobs for the firm of Price and Waters, LLP, which is a
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“The General Motors job is only half done, but we have already spent all of the $1 million that we expected to spend on that job,” he said. “However, we have spent only $500,000 of the $800,000 that we expected to spend on the U.S. Department of Defense job, even though we are 90 percent done with the work.”
His boss told Chuck, “Assign the rest of the costs needed to complete the General Motors job to your U.S. Department of Defense job. We’re under budget on that job and we get reimbursed for costs on government jobs.”
Required
a. What should Chuck do?
b. Does it matter that Chuck’s consulting firm is reimbursed for costs on the government jobs? Explain.
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Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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