Aero Dynamics manufactures airplane parts amd engines for a variety of military and civilian aircraft. thr company is the sole provider of rocket engines for the U.S. military that is sells for full cost plus 5% markup
Aero Dynamic's current cost system is a direct labor-hour-based overhead allocation system. Recently, the company conducted a pilot study on the feasibility of using an activity-based costing system.the study shows that the new ABC system,while more accurate and timely, will result in the assignment of lower costs to the rocket engines and higher costs to the company's other products. Apparently, the current direct labor-based costing system overcosts the rocket engines and undercosts the other products. On hearing of this, top management has decided to scrap thr plans to adopt the lower the price and, the profit fo this part of Aero Dynamic's Business.
Required : As the management accountant partcipating in this ABC piloudy project, what is your responsibility when you learn that top management has decided to cancle the plans for the ABC system? Can you ignore your professional ethics code in this case? What would you do?