Question

Pyramid Printing Company is a printer of magazines and retail inserts. Sally Sound, the company’s Controller, initiated an inquiry regarding what has surfaced as a large material variance for the month of April 2017. After inquiring of the production department, it was discovered that many copies of an insert for a major retailer’s holiday promotion were out of register and discarded. Sally then noted that these were not properly recorded as spoilage to deflect attention from quality issues.

What are the ramifications of reporting the quality-impaired product as a material variance rather than spoilage? Discuss the accuracy of the expenses recorded for the period, as well as any relevant ethical issues.

Answer 1

the eThis issue has to do with abnormal spoilage; which is not inherent in a particular production process and wouldn't arise under efficient operating conditions. This is showing that inefficiency of recording of the transactions so that it can escape from the quality standards which was setup by the sally sound

The Accuracy of the transaction can’t be considered as true because there is no proper evidence which provides that this expenses are free from any kind of the fraud

The ethical issues in this case is that the misconcepted the goods from one department and considers it as the spoilage which is unethical according to the law