Posted by & filed under Accounting Information Systems, Accounting Principles, Auditing, Cost Accounting, Financial Accounting, Financial Statement Analysis, Intermediate Accounting, Managerial Accounting, Video Updates.

The F-35 is being produced by 1,200 suppliers. Seen as the fighter jet of the future, it has trouble flying at night, its engines have exploded during takeoff, and early models suffered structural cracks.

Questions:
1. Why is the military still pursuing the production of this pink elephant? Why doesn’t technology become less costly for the military?
2. What features were suppose to be cost effective? What are the implications of this case for internal auditing?
3. Which aircraft is it supposed to replace?
4. According to Fallows, how many will be produced at the end of the contract?
5. Based on the limited information in the article and video, perform a cost/benefit analysis of this contract program.

Fallow, J. and J. Lay. (2014). The Pentagon’s $1.5 Trillion Mistake. The Atlantic, Dec. 29 (Retrievable online at http://www.theatlantic.com/video/index/384088/the-pentagons-15-trillion-mistake/)