Ethics and morality: key concepts and discussions

Ethics

LC1: Contribution Margin and Break-Even Point

The contribution margin is the difference between a company's sales and its variable costs (Peavler, 2014). It measures a company's ability to maintain its variable costs at low levels. In other words, it shows the amount of money a company has to pay off its fixed expenses after all variable expenses have been settled. It also measures the amount of sales revenue that, after fixed costs have been deducted, contributes to the net operating loss or profit of the company. Thus:

Contribution margin = sales revenue -- variable costs

The per-unit contribution margin is calculated as;

Per-unit contribution margin = per-unit sales revenue -- variable costs per unit

The business' net operating profit or loss = contribution margin -- fixed costs

The break-even point is the amount of sales at which the sales revenue equals the total fixed and variable expenses, such that the company just breaks even, making neither profits nor losses. In terms of contribution margin, it is the level of sales at which the contribution margin equals fixed costs, and hence, the net operating profit or loss is zero (Peavler, 2014). Thus;

The break-even point in units = total fixed costs/contribution margin per unit.

5 LC2: Preparing Financial Statements on a Pro-Forma Basis

Pro-forma financial statements are often prepared alongside GAAP-adjusted statements; however, unlike the latter, whose preparation is guided by strict GAAP standards, the former are merely hypothetical figures computed on their perceived degree of relevance. Towards this end, companies calculate the same on their own discretion, excluding items that they think reflect negatively on the company's position, and including other items that they feel reflect the firm's actual performance better.

In this case, therefore, the departmental tram could choose to prepare a pro-forma income statement in addition to the GAAP-adjusted statement; and since pro-forma statements are not guided by such strict regulations, any cost items that would reduce the level of reported earnings could be stripped off. This way, the department's earnings would appear better than they actually are; and the team can then convince the managers that even if they did not meet the GAAP-adjusted financial expectations, at least they were able to meet the pro-forma expectations.

6 LC1: Equity Feminism

Equity feminists argue that men and women are equal and should be treated as equals, with equal access to work and opportunities (Anne, 2013). The key benefit of this approach is its ability to bring about amicable and fair solutions in real-life disputes, thereby preventing a situation where women are unfairly discriminated against on the basis of gender, and are viewed as inferior creatures. Further, it strengthens the Biblical perspective that man and woman were created to supplement each other, and not for one to serve the other

The key advantage of this thought is that it reinforces the principles of justice, fairness, and equity. There are two fundamental disadvantages associated with his thought. First, it fails to achieve true equality for the female gender and portrays women as continually competing to catch up with them. Moreover, this perspective does not recognize that women have different likes and interests.

6 LC2: Moral Worth Criterion