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Ethics in Action Dash Riprock is a cost analyst with Safe Insurance Company. Safe is applying standards to its claims payment operation. Claims payment is a repetitive operation dial could be evaluated with standards. Dash used time and motion studies to identify an ideal standard of 36 claims processed per hour. The Claims Processing Department manager, Henry Tudor, has rejected this standard and has argued that the standard should be 30 claims processed per hour. Henry and Dash were unable to agree, so they decided to discuss this matter openly at a joint meeting with the vice president of operations, who would arbitrate a final decision. Prior to the meeting, Dash wrote the following memo to the VP: To: Anne Boleyn, Vice President of Operator From: Dash Riprock Re: Standards in the Claims Processing Department As you know, Henry and I are scheduled to meet with you to discuss our disagreement with respect to the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the deal standards is 36 claims processed per hour. Henry argues that 30 claims processed per hour would be more appropriate. I believe he is trying to ‘pad’ the budget with some slack. I’m not sure what he is trying to get away with, put I believe a tight standard will drive up efficiency in his area. I hope you will agree when we meet with you next week. Discuss the ethical and professional issues in this situation.

BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094
BuyFind

Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

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Chapter
Section
Chapter 23, Problem 23.23.1CP
Textbook Problem

Ethics in Action

 Dash Riprock is a cost analyst with Safe Insurance Company. Safe is applying standards to its claims payment operation. Claims payment is a repetitive operation dial could be evaluated with standards. Dash used time and motion studies to identify an ideal standard of 36 claims processed per hour. The Claims Processing Department manager, Henry Tudor, has rejected this standard and has argued that the standard should be 30 claims processed per hour. Henry and Dash were unable to agree, so they decided to discuss this matter openly at a joint meeting with the vice president of operations, who would arbitrate a final decision. Prior to the meeting, Dash wrote the following memo to the VP:

 To: Anne Boleyn, Vice President of Operator

 From: Dash Riprock

 Re: Standards in the Claims Processing Department

 As you know, Henry and I are scheduled to meet with you to discuss our disagreement with respect to the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the deal standards is 36 claims processed per hour. Henry argues that 30 claims processed per hour would be more appropriate. I believe he is trying to ‘pad’ the budget with some slack. I’m not sure what he is trying to get away with, put I believe a tight standard will drive up efficiency in his area. I hope you will agree when we meet with you next week.

 Discuss the ethical and professional issues in this situation.

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Chapter 23 Solutions

Accounting
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Ch. 23 - Direct materials variances Bellingham Company...Ch. 23 - Direct materials variances Dvorak Company produces...Ch. 23 - Direct labor variances Bellingham Company produces...Ch. 23 - Direct labor variances Dvorak Company produces a...Ch. 23 - Factory overhead controllable variance Bellingham...Ch. 23 - Factory overhead controllable variance Dvorak...Ch. 23 - Factory overhead volume variance Bellingham...Ch. 23 - Factory overhead volume variance Dvorak Company...Ch. 23 - Standard cost journal entries Bellingham Company...Ch. 23 - Standard cost journal entries Dvorak Company...Ch. 23 - Income statement with variances Prepare an income...Ch. 23 - Income statement with variances Prepare an income...Ch. 23 - Activity inputs and outputs The following are...Ch. 23 - Activity inputs and outputs The following are...Ch. 23 - Standard direct materials cost per unit Roanoke...Ch. 23 - Standard product cost Sana Rosa Furniture Company...Ch. 23 - Budget performance report Genie in a Botile...Ch. 23 - Direct materials variances The following data...Ch. 23 - Direct materials variances Silicone Engine Inc....Ch. 23 - Standard direct materials cost per unit from...Ch. 23 - Standard product cost, direct materials variance...Ch. 23 - Direct labor variances The following data relate...Ch. 23 - Direct labor variances La Barte Company...Ch. 23 - Direct tabor variances Greeson Clothes Company...Ch. 23 - Direct labor standards for nonmanufacturing...Ch. 23 - Direct labor standards for a service company One...Ch. 23 - Direct labor variances for a service company...Ch. 23 - Direct materials and direct labor variances At the...Ch. 23 - Flexible overhead budget Leno Manufacturing...Ch. 23 - Flexible overhead budget Wiki Wiki Company has...Ch. 23 - Factory overhead cost variances The following data...Ch. 23 - Factory overhead cost variances Blumen Textiles...Ch. 23 - Factory overhead variance corrections The data...Ch. 23 - Factory overhead cost variance report Tannin...Ch. 23 - Recording standards in accounts Cioffi...Ch. 23 - Recording standards in accounts The Assembly...Ch. 23 - Income statement indicating standard cost...Ch. 23 - Nonfinancial performance measures Diamond Inc. is...Ch. 23 - Nonfinancial performance measures Alpha University...Ch. 23 - Direct materials and direct labor variance...Ch. 23 - Flexible budgeting and variance analysis I Love My...Ch. 23 - Direct materials, direct labor, and factory...Ch. 23 - Factory overhead cost variance report Tiger...Ch. 23 - Standards for nonmanufacturing expanses Code Head...Ch. 23 - Direct materials and direct labor variance...Ch. 23 - Flexible budgeting and variance analysis Im Really...Ch. 23 - Direct materials, direct labor, and factory...Ch. 23 - Factory overhead cost variance report Feeling...Ch. 23 - Standards for nonmanufacturing expenses for a...Ch. 23 - Genuine Spice Inc. began operations on January 1...Ch. 23 - Ethics in Action Dash Riprock is a cost analyst...Ch. 23 - Communication The senior management of Tungston...Ch. 23 - Variance interpretation You have been asked to...Ch. 23 - Variance interpretation Vanadium Audio Inc. is a...

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