Abstract
Students frequently have difficulty systematically analyzing ethical situations. They tend to respond to situations by indicating that a particular action is “just not right.” This case uses the IMA Statement of Ethical Professional Practice as a framework for analyzing and resolving ethical conflict. The case is based on cost/managerial accounting and is appropriate for late in a managerial accounting course or early in a junior level cost accounting course. The case involves cost analysis, and it examines gross margin versus contribution margin as tools for analyzing product profitability. It also challenges the student to examine the behavior of several of the main characters from an ethical point of view and to examine pathways for resolving ethical conflicts. Suggested solutions, additional discussion, and teaching notes are provided. The story is based on a real situation with a privately held company. Details have been changed to protect the identity of the persons and companies involved.
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