Incremental sales from increased exposure $9000000Less:Incremental cost of goods sold $3900000Cost of TV ads 2500000 6400000Incremental profit $2600000While
Joan is quite confident in the cost of the ads and the incremental cost
of goods sold if sales are $9000000 she is quite uncertain about the
sales increase. In fact she believes that her estimate is on the high
side. However she also believes that if she puts in a more conservative
estimate such as $7000000 the president will not go along with the
TV ads even though they still will generate substantial profits at
$7000000 of incremental sales.RequiredIs it unethical of
Joan to bias her estimate of incremental sales on the high side given
that she believes the ultimate outcome is in the best interest of the
company?