New York Beverages, Inc., has three plants that make and bottle cola, lemon-lime, and miscellaneous flavored beverages, respectively. The raw materials, labor costs, and automated technology are comparable among the three plants. Top management has initiated an incentive compensation plan whereby the workers and managers of the plant with the lowest unit cost per bottle will receive a year-end bonus. The results, approved by the plant manager and reported by the plant controllers at each location, were as follows:

Required:
1. When provided copies of the results as a justification for distributing the bonus to the Queens employees, the plant controllers at Bronx and Brooklyn accused Queens of manipulating the inventory figures. Reviewing the above schedule, what do you think is the nature of the accusation and how would such action affect the unit cost computation?
2. Is there anything in the Institute of Management Accountants (IMA) Code of Professional Ethics that the Queens plant controller should be aware of in this situation?
3. Assume that the Queens plant controller revises the unit cost to more accurately reflect reality. What should she do if the plant manager insists that the unit cost computation remain asis?

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Brooklyn $450,000 375,000 750,000 ltem Materials Labor Overhead. Total Equivalent units of production: Completed Ending work in process .. Bromx $200,000 170,000 340,000 $710,000 Queens $325,000 250,000 500,000 $1,575,000 $1075,000 3,500,000 100,000 (50% com plete) 3,550,000 6,200,000 400,000 (25% complete) 6,300,000 S0.25 6,450,000 Equivalent units Unit cost . 6,450,000 S0.167