Scenario B: Suppose a Manager Faces a Question Regarding How

question 108

Multiple Choice

Scenario B: Suppose a manager faces a question regarding how to handle a defective piece of equipment that his company sold.Telling the customer would cost him a substantial amount of money.At the same time,if the equipment fails,it could lead to serious injury of the customer.The manager is going to choose among three options presented by colleagues:
Option 1: Keep quiet about the defect.
Option 2: Talk to others and see what they would have done in the same situation.
Option 3: Disclose the defect and suggest alternatives because it is the honest thing to do.
-Which of the following options best describes the ethical approach used in option 3?

• A)universalism
• B)egoism
• C)utilitarianism
• D)relativism
• E)virtue ethics

---

Definitions:

Net Operating Income

A company's income after operating expenses have been deducted but before deducting interest expenses and taxes.

Contribution Margin Ratio

The percentage of each sales dollar remaining after variable costs have been deducted, indicating how much of sales revenue is available to cover fixed costs and generate profit.

Target Profit

The desired level of financial gain set by a business for a specific period, guiding pricing strategies and operational decisions.

Monthly Fixed Expense

Expenses that do not change month to month, regardless of business activity, such as rent or salaries.