Managerial Accounting

Free Version

Upgrade subject to access all content


Sidney Co. Unethical Ways to Reduce Costs


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?


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


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


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


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