?

Managerial Accounting

Free Version

Upgrade subject to access all content

Easy

Sidney Co. Unethical Ways to Reduce Costs

MGRACT-JDO2BE

Sidney Co. is trying to meet a tough budget and costs have been too high this quarter. The controller has called a meeting to review strategies to reduce costs.

Which of these is unethical to consider in reaching the cost cutting goals?

A

Change FOB shipping terms to FOB Shipping Point so customers pay freight costs.

B

Require all vendors to give terms of 45 days or longer to reduce short-term borrowing costs.

C

Freeze travel and training costs through year end to reduce discretionary costs.

D

Increase standard costs to trigger over-applied overhead which will reduce cost of goods sold.