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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Ethics in Action

Aaron McKinney is a cost accountant for Majik Systems Inc. Martin Dodd, vice president of marketing, has asked Aaron to meet with representatives of Majik Systems’ major competitor to discuss product cost data. Martin indicates that the sharing of these data will enable Majik Systems to determine a fair and equitable price for its products.

Would it be ethical for Aaron to attend the meeting and share the relevant cost data? Why or why not?

To determine

Ethical Case Study:

Case Summary:

MD the vice president of marketing of Company MS asks the cost accountant AM, to meet the representatives of the competitors of Company MS, and discuss product cost data. MD considers this shall help Company MS in determining the fair and equitable price for its products.

To Explain:  Whether AM should attend the meeting or not.

Explanation

AM should not attend the meeting. The meeting is conducted by the representatives of the competitors of Company MS, and requires disclosure of the cost details planned by Company MS. This will provide a competitive edge to the competitor and may result in a loss for the Company MS. As per the law, the price fixing by an organization must be internal and kept secret...

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