Sandy Lang and Mandy Starr, Two Salespersons in Adjoining Territories

question 1

Essay

Sandy Lang and Mandy Starr, two salespersons in adjoining territories, regularly compete for bonuses. During the last month, their dollar volume of sales, on which the bonuses are based, was nearly equal. On May 30, 2014, each made a large sale. Both orders were shipped on May 31, 2014, the last day of the month, and both were received by the customers on June 5, 2014. Sandy's sale was FOB shipping point (ownership passes to buyer at time of shipping), and Mandy's was FOB destination (ownership passes to buyer at time of receipt). The printed policy of the company states that sales "count" for purposes of calculating bonuses on the date that ownership passes to the purchaser. Sandy's sale was therefore counted in her May monthly total of sales while Mandy's sale was not. Mandy is quite upset. She has asked you to just include it, or to take Sandy's off as well. She also has told you that you are being unethical for allowing Sandy to get a bonus just for choosing a particular shipping method.
As the accounting manager write a memo to Mandy on June 15, 2014, and explain your position.

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Definitions:

CEO

Acronym for Chief Executive Officer, the highest-ranking executive in a company, responsible for major corporate decisions and overall operations.

Successor

An individual or entity that follows another in a particular role or position, often inheriting responsibilities or titles.

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A specialized type of consultancy that helps organizations identify and recruit highly qualified candidates for senior-level and executive jobs.

CEO

The Chief Executive Officer, the highest-ranking individual in a company or organization, responsible for making major corporate decisions.