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The Case About the Number of Chips

The case about the number of chips in cookies has accounting and ethical sides as the reduction of chocolate lead to costs decrease, and the managers involved might have a conflict of interest. When the new manager noticed that the number of chips could be reduced to save the costs, he concluded that it would not affect the sales. However, it turns out that the chip costs have declined, and reporting to the manager who initially launched this line of cookies can help in searching for solutions.

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The 10% reduction of chips did not affect the sales when it occurred for the first time, yet the demand for cookies dropped. The vice president and the manager who replaced him needed to research and discuss the details of the cookies’ production and sale. The risks related to the market and demand, in general, do not depend on the number of ingredients. However, the new manager optimized the process cost, and it decreased the losses due to the dropping demand. The best solution is to evaluate the risks of reducing the number of chips and keep it reduced during the period of low demand.

The issue’s ethical side is that the manager who was promoted after launching the line of cookies missed considering such detail as the process cost. The moral framework for an accounting requires personal responsibility to be contributed to the consequences (Sorensen et al., 175). The 10% reduction and different results should be on the vice president’s interests even though he did not participate in the reduction decision-making process. He and the new manager have to revise the process costs and find the balance between price and values in the low demand period.

Work Cited

Sorensen, Daniel P., et al. “Developing and measuring the impact of an accounting ethics course that is based on the moral philosophy of Adam Smith.” Journal of Business Ethics, vol. 140, no. 1, 2017, pp. 175-191.

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