Answered: Anstead Co. is experiencing a decrease…

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter2: Accounting For Materials

Section: Chapter Questions

Problem 11E: Renfro, Inc. was franchised on January 1, 2016. At the end of its third year of operations, December...

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Anstead Co. is experiencing a decrease in sales and operating income for the fiscal year ending October 31, 2016. Ryan Frazier, controller of Anstead Co., has suggested that all orders received before the end of the fiscal year be shipped by midnight, October 31, 2016, even if the shipping department must work overtime. Because Anstead Co. ships all merchandise FOB shipping point, it would record all such shipments as sales for the year ending October 31, 2016 thereby offsetting some of the decreases in sales and operating income.

Respond to the following questions:

Is Ryan Frazier behaving in a professional manner?
Do you think Ryan Frazier would have made the same suggestion if merchandise was shipped FOB destination point?
If you were in Ryan’s position what would you suggest?

Reply to one or more other discussions:

Do you agree with the assessment of Ryan's behavior? Why or why not?
Why do you think Ryan made this decision?

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