Question: What should Seth Johnson do in response to Campbell's comments? A . Incorrect reporting of ABC costs with the goal of retaining both the Mammoth
What should Seth Johnson do in response to Campbell's comments?
A Incorrect reporting of ABC costs with the goal of retaining both the Mammoth and Maximum product lines is unethical. Johnson should indicate to Campbell that the product cost calculations are, indeed, appropriate. If Campbell still insists on modifying the product cost numbers, Johnson is not obligated to take any further action because Campbell is his superior.
B Incorrect reporting of ABC costs with the goal of retaining both the Mammoth and Maximum product lines is ethical. Johnson has the obligation to follow the wishes of his immediate supervisor. Raising the matter with one of Campbell's superiors would be unethical.
C Incorrect reporting of ABC costs with the goal of retaining both the Mammoth and Maximum product lines is not unethical as the information is based on estimates rather than historical data. Once the information is communicated to Campbell, Johnson is not obligated to take any further action.
D Incorrect reporting of ABC costs with the goal of retaining both the Mammoth and Maximum product lines is unethical. Johnson should indicate to Campbell that the product cost calculations are, indeed, appropriate. If Campbell still insists on modifying the product cost numbers, Johnson should raise the matter with one of Campbell's superiors. If after taking all these steps, there is continued pressure to modify product cost numbers, Johnson should consider resigning from the company rather than engage in unethical behavior.
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