Ehtic Case

The number of units scheduled for production won't be affecting the reportable operational financial gain or loss for the year if variable cost accounting is use. All fastened producing overhead prices are going to be treated as an expense of the amount all the same of the amount that units made. No manufacturing overhead cost are going to be shifted between periods over the inventory account, and financial gain are going to be a function of the amount of units sold, instead of a function of the amount of units made and sold-out.

Expected sales for the last quarter of the year + Desired minimum inventory = Total units needed for sales and desired - Current inventory on hand -- September 30 = Desired production for the 4th quarter

18,000+1,500=19,500-12,000= $7,500

2) 2) In building the inventory to the max levels, Mr. Constantinos will be able to settle for some of the year's fixed manufacturing overhead to the long run years through the inventory account, instead of having all of these costs as charges on the present year's financial statement. In manufacturing enough units to create the inventory to the max level that the storage facilities, Mr. Constantinos might get avoid the present year of future manufacturing overhead value and thereby create the foremost out of the current year's net operating gain (and his bonus).

Expected sales for the last quarter of the year + Maximum inventory storage facilities available = Total units needed for sales and desired - Current inventory on hand September 30 = Desired production for the 4th quarter

18,000 +30,000 = 48,000 - 12,000 = $ 36,000

3) 3) By setting a production schedule which will maximize his division's internet operative financial gain and maximize his own bonus. Mr. Constantinos is going to be acting against the simplest interests of the corporate as an entire. The additional units are not required and can be valuable to hold in inventory. Moreover, there's...