Read Case 9-56 – “Budgetary Performance, Rewards, and Ethical Behavior in the following eBook below, and then answer questions 1 through 4 to formulate your case assignment.

Mowen, M. (2010). Cornerstones of Managerial Accounting 4th Edition. Manson, OH.: South-Western, Cengage Learning, Pg 402-403.

A link to a preview of the book via Google is provided below.

http://books.google.com/books?id=c8VpMhZSBl8C&pg=PA402&lpg=PA402&dq=Linda+Ellis,+division+manager,+is+evaluated+and+rewarded+on+the+basis+of+budgetary+performance.&source=bl&ots=cWeyWOtVzD&sig=Gyd7s7lsFeIIiYcPtD_8KANRipQ&hl=en&sa=X&ei=gUUbU-CiCaSU2QWewYDwCg&ved=0CCcQ6AEwAA#v=onepage&q=Linda%20Ellis%2C%20division%20manager%2C%20is%20evaluated%20and%20rewarded%20on%20the%20basis%20of%20budgetary%20performance.&f=false

Guideline to follow:

Introduction

II.               Body

A.               Linda’s actions are wrong: actual v. planned expenses and profits has effect

B.               Marketing Manager: defer sales to next period

C.               Plant Manager: keeping an eye on the cash flow budget

D.               Division Controller: recognizing expenses in prior cycle

III.             Conclusion

A.               Justification is improving morale

B.               Important for top management to think about goals and rewards from the employees’ standpoint

C.               Top management should ensure employees are aware of the ethical implication of their decisions.

D.               Implications of falsifying expenses and revenues

E.               Who can fix this situation?

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