Why Choose Us?
0% AI Guarantee
Human-written only.
24/7 Support
Anytime, anywhere.
Plagiarism Free
100% Original.
Expert Tutors
Masters & PhDs.
100% Confidential
Your privacy matters.
On-Time Delivery
Never miss a deadline.
Chapter 11 Discussion Cameron Bly is a sales manager for an automobile dealership
Chapter 11 Discussion
Cameron Bly is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of autos sold in the year less related warranty expenses. Actual warranty expenses have varied over the prior 10 years from a low of 3% of an automobile's selling price to a high of 10%. In the past, Bly has tended to estimate warranty expenses on the high end to be conservative. He must work with the dealership's accountant at year-end to arrive at the warranty expense accrual for cars sold each year.
- Does the warranty accrual decision create any ethical dilemma for Bly?
- Since warranty expenses vary, what percent do you think Bly should choose for the current year? Justify your response.
Expert Solution
1) By always guessing to the 10% of the actual warranty expense creates an ethical dilemma for him. The fact that he picks the highest expense has it’s pro and con. The pro is that he will always have enough money so anything below 10% he does not have to worry. However, having too much of an expense is that he is not allowing himself to receive the compensation he deserves for doing the job he does. His bonus with be less then what it could be if he saves less money.
2) I feel Bly save about 6-7 percent of the expense warranty. It allows him to have a price in the middle so if anything is more or he less he is not in a hole to get the money. It is easy for him to resolve and also improved the chances of him getting more of a bonus.
Archived Solution
You have full access to this solution. To save a copy with all formatting and attachments, use the button below.
For ready-to-submit work, please order a fresh solution below.
