ETHICS CHALLENGE [LO1 - CC1, 3; LO2 - CC9, 10, 11; L03 - CC12] "I truly think that we should use the scattergraph method to analyze mixed costs," said Suzanne Arthur to her accountant, Jane Golding. "It gives us the flexibility to manage the proportion of variable and fixed costs according to the decisions that we are required to make." Jane wondered whether this would offer flexibility or the ability to manipulate the data as individual managers saw fit. "How can this so- called flexibility be good, when I can compute 10 different amounts for contribution margin and claim that they are all correct?" she asked herself. She turned to her handbook of the International Financial Reporting Standards (IFRS), but found no reference to this in the standards. Required: 1. Do you believe that the scattergraph method gives managers the ability to manipulate costs? 2. Do you believe that the use of a particular method can lead to an ethical dilemma? Why or why not?

ETHICS CHALLENGE [LO1 - CC1, 3; LO2 - CC9, 10, 11; LO3 - CC12] -I truly think that we should use the scattergraph method to analyze mixed costs," said Suzanne Arthur to her accountant, Jane Golding. "It gives us the flexibility to manage the proportion of variable and fixed costs according to the decisions that we are required to make." Jane wondered whether this would offer flexibility or the ability to manipulate the data as individual managers saw fit. "How can this socalled flexibtlity be good, when 1 can compute 10 different amounts for contribution margin and claim that they are all correct" she asked herself. She turned to her handbook of the International Financial Reporting Standards (IFRS), but found no reference to this in the standards. Required: 1. Do you believe that the scattergraph method gives managers the ability to manipulate costs? 2. Do you believe that the use of a particutar method can lead to an ethicul dilemma? Why or why not