Ethics Challenge BTN 4-1

You determine that several activities are unnecessary in conducting interviews and observing factory operations to implement an activity-based costing system. For example, warehouse personnel were inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both activities caused costs to be incurred but did not add value to the product. If you include this observation in your report, one or more employees who perform inspections will likely lose their jobs.

1. Explain the issue facing you in simple layman's terms.

2. What is the ethical issue, if any.

3. Who are the stakeholders or parties affected?

4. What IMA codes are being violated, if any.

5. What do you propose to do to resolve this issue.