You are the manager of a public company that produces a variety of kitchenware. Demand is decreasing and it appears that earnings expectations will not be met this quarter which could lead to the selection of the share price of the company and you risk losing your job. One employee from the marketing department suggested to offer more discount to customers to increase the sales. You realize that rather than help the bottom line, more discount could lead to even lower income. The accountant suggested to simply increase the production despite the fall in demand to increase the reported profit as storage capacity is unutilized.
Does the accountant’s suggestion make sense? Why?
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Question asked by ganesh_shrestha