At the End of an Especially Good Year,a Company Decides

question 210

Multiple Choice

At the end of an especially good year,a company decides to give bonuses to its sales employees.Two salespeople are included: Tracy shows a better-than-average sales record,whereas Colin was only an average salesperson.Colin has a reputation for being a straight shooter who complies strictly with the company's ethical code.On the other hand,Tracy made some deals that,as co-workers confided to middle managers,were "on the edge" of dishonesty.When the company's ethics panel reviewed one such deal,it was found to have been compliant with the letter of the stated code.Nevertheless,the financial officer recommends that both employees be given the same bonus. Which of the following,if true,most strongly supports the financial officer's position?

• A)The employees had received and duly signed a statement agreeing to uphold the company's code of ethics.
• B)The co-workers who reported the alleged shady deals had ethical incidents in their own personnel files.
• C)The firm recently conducted a social audit,which revealed concern about the firm's tolerance of predatory practices by sales personnel and their impact on workplace morale.
• D)The company's code gives very detailed definitions of what separates a responsible business transaction from one that includes dishonesty.
• E)The strong sales performance of this department was a major factor in improving the firm's viability during an economic downturn.

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Definitions:

Unit Product Cost

The total cost (both fixed and variable) associated with producing one unit of a product.

Direct Labor-hours

Total work hours contributed by staff directly associated with the production of a product or the offering of a service.

Manufacturing Overhead

Indirect costs related to manufacturing that cannot be directly traced to specific units produced, such as electricity or maintenance.

Fixed Manufacturing Overhead

The fixed costs that are incurred during the manufacturing process, including costs such as rent, insurance, and salaries for management, that do not vary with production volume.