Reference no: EM131793671
Problem
Demitri looked at the numbers, frowning. He couldn't quite put his finger on it, butsomething in his CVP analysis didn't feel quite right.After looking at it for almost an hour, he found it. He had accidentally transposedone number. Instead of showing the MOH cost/unit as $0.53, he had typed them in as$0.35, increasing the CM/candle by $0.18. He picked up the phone to call Josey, thenstopped as he noticed the clock. She wouldn't be in her office. She would be in theboardroom, right now, showing the Board his incorrect numbers.
What was he going to do? He couldn't interrupt a Board meeting, could he? A newemployee walking into an important meeting to tell everyone that he had made adumb mistake like this. It would be career suicide! He looked at the numbers again.It wasn't really that big of a mistake, was it? It was only about $0.18 per unit, and itonly changed the breakeven point by less than 9,000 units. From what he rememberedfrom his audit class, that was not even material. Perhaps it would be better to just letit go. Chances are no one would notice, and he could always fix it next quarter.
Who will be affected by Demitri's decision? In answering this question, think outsideof the box and consider individuals outside of the department and even Wedgewood. Would your answers be different if he'd used $0.75 instead of the $0.35? Why or whynot?