Behavior relating to the cost information

Reference no: EM13150742

Farmer Frank's produces item from local farm products and distributes them to supermarkets. Over the years, price competition has become increasingly important, so Susan Kramer, the company's controller, is planning to implement a standard cost system for Farmer Frank's. She asked her cost accounting, Margaret Chang, to gather cost information on the production of blueberry, preserves (Farmer Frank's most popular product). Margaret reported than blueberries cost $.75 per quart, the price she intends to pay to her good friend who has been operating a blueberry farm that has been unprofitable for the last few years. Because of an oversupply in the market, the price for blueberries has dropped to $.60 per quart. Margaret is sure that the $.75 price will be enough to pull her friend's farm out of the red and into the black.

Required:

Is Margaret's behavior regarding the cost information she provided to Susan unethical? Explain your answer.

Reference no: EM13150742

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