Your family started a new manufacturing business making outdoor benches for use in parks and outdoor venues two years ago. The business has been very successful, and sales are soaring. Because of this success, your family realizes that the equipment purchased to start the business will not last as long as expected because the company has needed to run twenty-four-hour production shifts for most of the past year. There has been a lot of wear and tear on the equipment. The original useful lives and salvage values are not as accurate as your family had hoped. Your aunt, who is the production manager for the family business, has approached you because she is concerned about this issue, and she knows you have had an accounting class. What advice do you have for her? How should the company read just given the realities of the last few years? How could wear and tear on the equipment affect your inventory, supply chain, and logistics in the future? Are there any ethical issues that your aunt should consider in determining salvage values? Thoughts of Response Think about the ways companies use equipment how much time they maintain the equipment for certain use.
