Question

FIll in the blanks with options in below:

Answer 1

Answer:

To show better​ performance, a department supervisor might report a higher degree of completion resulting in Understated cost per equivalent unit and Overstated operating income. In other​ words, estimates of degree of completion can help controlling the carried cost. To guard against the possibility of bias, managers should ask supervisors specific questions about the process they followed. Top management should always emphasize obtaining the correct answer, regardless of how it affects reported performance. This emphasis drives ethical actions throughout the organization.

Explanation:

A supervisor should reduce company's cost and enhance its earning. To show better performance and stand out among other employees, a supervisor should take measures to report higher completion of units and reducing cost per equivalent unit which will ultimately increase operating income of a company. The correct estimate of degree completion for units helps to control the cost carried in ending inventory and the cost carried in the beginning inventory of the following year. The correct estimate of degree of completion of units helps smooth the earnings of a company. To guard the possibility of bias and favors, managers should ask supervisor about the process they follow and investigate if any discrepancy is found. Top management of a company emphasizes to obtain correct answer and drive ethical actions within the company.