Requests for new products or expansions of product line

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Reference no: EM131624584

Garner Company requires its marketing managers to submit estimated cost behavior data on all requests for new products or expansions of a product line. Judy Oslo is a new manager. Her calculations show a fixed cost for a new project at $100,000 and a variable cost of $5 per unit. Based on these calculations, the low-volume project would not be profitable. She shares her dismay with Nina Smythe, another manager. Nina strongly advises her to revise her estimates. She points out that several of the costs that had been classified as fixed costs could be considered variable because they are mixed costs. When the data have been revised, classifying those costs as variable costs, the project appears viable.

Part (a): Who are the stakeholders in this decision?

Part (b): Is it ethical for Judy to revise the costs as indicated? Briefly, explain.

Part (c): What should Judy do?

Reference no: EM131624584

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