Question: Job costing contracting ethics Kingston Company manufactures

Job costing, contracting, ethics. Kingston Company manufactures modular homes. The company has two main products that it sells commercially: a 1,000 square foot, one-bedroom model and a 1,500 square foot, two-bedroom model. The company recently began providing emergency housing (huts) to FEMA. The emergency housing is similar to the 1,000 square foot model. FEMA has requested Kingston to create a bid for 150 emergency huts to be sent for flood victims in the south. Your boss has asked that you prepare this bid. In preparing the bid, you find a recent invoice to FEMA for 200 huts provided after hurricane Katrina. You also have a standard cost sheet for the 1,000 square foot model sold commercially. Both are provided as follows:

Required
1. Calculate the total bid if you base your calculations on the standard cost sheet assuming a cost plus 15% government contract.
2. Calculate the total bid if you base your calculations on the September 15, 2005, invoice assuming a cost plus 15% government contract.
3. What are the main discrepancies between the bids you calculated in #1 and #2?
4. What bid should you present to your boss? What principles from the IMA Standards of Ethical Conduct for Practitioners of Management Accounting and Financial Management should guide yourdecision?
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  • CreatedNovember 05, 2011
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