Reference no: EM132571870

Ethics Case for Standard Cost & Balance scorecards

• At Camden Manufacturing Company, production workers in the Painting Department are paid on the basis of productivity. The labor time standard for a unit of production is established through periodic time studies conducted by Lowery Management Consultants. In a time study, the actual time required in completing a specific task by a worker is observed. Allowances are then made for preparation time, rest periods, and clean-up time. Ron Orlano is one of several veterans in the Painting Department.
• Ron is informed by Lowery that he will be used in the time study for the painting of product. The findings will be the basis for establishing the labor time standard for the next 6 months. During the test, Ron deliberately slows his normal work pace in an effort to obtain a labor time standard that will be easy to meet. Because it is a new product, the Lowery representative who conducted the test is unaware that Ron did not give the test his best effort.

Question (a) Who was benefited and who was harmed by Ron's actions?

Question (b) Was Ron ethical in the way he performed the time study test?

Question (c) What measure(s) might the company take to obtain valid data for setting the labor time standard?