If I can reduce my cost by 40,000 during this last quarter, my division will show a profit that is 10% above the planned level, and I will receive a 10,000 bonus. However, given the projections for the fourth quarter, it does not look promising. I really need that 10,000. I know of one way that I can qualify. All I have to do is lay off my three expensive salespeople. After all, most of the orders as in for the fourth quarter, and I can always hire new sales personnel at the beginning of the last year. Is there any way to redesign the accounting reporting system to discourage the type of behavior that the manger is contemplating?

If I can reduce my cost by 40,000 during this last quarter, my division will show a profit that is 10% above the planned level, and I will receive a 10,000 bonus. However, given the projections for the fourth quarter, it does not look promising. I really need that 10,000. I know of one way that I can qualify. All I have to do is lay off my three expensive salespeople. After all, most of the orders as in for the fourth quarter, and I can always hire new sales personnel at the beginning of the last year. Is there any way to redesign the accounting reporting system to discourage the type of behavior that the manger is contemplating?

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter18: The Management Of Accounts Receivable And Inventories

Section: Chapter Questions

Problem 10P

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