Ask Question, Ask an Expert

+61-413 786 465

info@mywordsolution.com

Ask Operation Management Expert

Rick Pines and Joe Lopez are the plant managers for High Mountain Lumber's particle board division. High Mountain Lumber has adopted a just-in-time management philosophy.

Each plant combines wood chips with chemical adhesives to produce particle board to order, and all product is sold as soon as it is completed. Laura Green is High Mountain Lumber's regional controller.

All of High Mountain Lumber's plants and divisions send Green their production and cost information. While reviewing the num­bers of the two particle board plants, she is surprised to find that both plants estimate their ending Work-in-Process Inventories at 75% complete, which is higher than usual.

Green calls Lopez, whom she has known for some time. He admits that to ensure their division would meet its profit goal and that both he and Pines would make their bonus (which is based on division profit), they agreed to inflate the percentage completion.

Lopez explains, "Determining the percent complete always requires judgment. Whatever the percent complete, well finish the Work-in-Process inventory first thing next year."

1. How would inflating the percentage completion of ending Work-in-Process Inventory help Pines and Lopez get their bonus?

2. The particle board division is the largest of High Mountain Lumbers divisions. If Green does not correct the percentage completion of this year's ending Work- in-Process Inventory, how will the misstatement affect High Mountain Lumbers financial statements?

3. Evaluate Lopez's justification, including the effect, if any, on next year's financial statements.

4. Address the following: What is the ethical issue? What are the options? What are the potential consequences? What should Green do?

Operation Management, Management Studies

  • Category:- Operation Management
  • Reference No.:- M92781123

Have any Question?


Related Questions in Operation Management

1 every business fits into one or more supply chains and

1) Every business fits into one or more supply chains and has a role to play in each of them ? TRUE OR FALSE 2) The goal of supply chain management is to increase sales of goods to customers while at the same time increa ...

Reference topic is for this project use the risk assessment

Reference topic is For this project, use the Risk Assessment Process to evaluate risk for Running in the Peachtree Marathon next year What are the risk assessments of running in the Peachtree Marathon next year? Are the ...

1 a safety professional has a number of responsibilities in

1. A safety professional has a number of responsibilities in the workplace. Name and briefly describe three of these responsibilities. 2. The Occupational Safety and Health Administration (OSHA) performs six major functi ...

1 information technology has had a negative impact on a

1. Information technology has had a negative impact on _______________. a. information richness b. informational accuracy c. work-life balance d. personal productivity 2. When your oral communication conflicts with your ...

Access to clean water is considered by many to be a basic

Access to clean water is considered by many to be a basic human right, yet significant numbers of people do not have it. Focus on a specific geographical area and identify obstacles and propose solutions. I have decided ...

1 what was the business-level strategy in the online sales

1. What was the business-Level strategy in the Online Sales Business Division, Amazon in 2016? What was the structure in the Online Sales Business Division, Amazon 2016? Was there a fit between the strategy and structure ...

1 a offers b 100000 for his farm and they sign an agreement

1. A offers B $100,000 for his farm, and they sign an agreement for the sale. Before the money is paid, A finds out that the market value of the farm is only $55,000. A: a. does not have to go through with the contract b ...

You have recently been hired by a company that wants to

You have recently been hired by a company that wants to “go global” and you have been selected to help research this possibility. The CEO has selected you to research your chosen country and report back. You must prepare ...

1 excavators inc ldquoeirdquo agreed to dig a foundation

1. Excavators, Inc. (“EI”) agreed to dig a foundation for Ralph’s barn for $7000. EI will be entitled to additional compensation in which situation? EI misjudged how long it would take to do the job, and billed Ralph for ...

Yoursquore responsible for the company tesla describe the

You’re responsible for the company Tesla, describe the market into which you intend to introduce your company’s products or services. What do you do for your target market, and what makes you the best? You need to outlin ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Why might a bank avoid the use of interest rate swaps even

Why might a bank avoid the use of interest rate swaps, even when the institution is exposed to significant interest rate

Describe the difference between zero coupon bonds and

Describe the difference between zero coupon bonds and coupon bonds. Under what conditions will a coupon bond sell at a p

Compute the present value of an annuity of 880 per year

Compute the present value of an annuity of $ 880 per year for 16 years, given a discount rate of 6 percent per annum. As

Compute the present value of an 1150 payment made in ten

Compute the present value of an $1,150 payment made in ten years when the discount rate is 12 percent. (Do not round int

Compute the present value of an annuity of 699 per year

Compute the present value of an annuity of $ 699 per year for 19 years, given a discount rate of 6 percent per annum. As