1. How would your error affect breakeven sales and operating income under the proposed sales
commission plan? Could this cause the president to reject the sales commission proposal?
2. Consider your ethical responsibilities. Is there a difference between: (a) initially making an
error and (b) subsequently failing to inform the controller?
3. Suppose you tell Matthew Barnhill of the error in your analysis. Why might the consequences
not be as bad as you fear? Should Barnhill take any responsibility for your error? What could
Barnhill have done differently?
4. After considering all the factors, should you inform Barnhill or simply keep quiet?