Next week Apple will release its fourth-quarter fiscal earnings report and, if projections are correct, it will be yet another record-breaking quarter for the electronics monolith, with revenues in excess of £13bn.

Needless to say, it's been a good year for Steve Jobs and the rest of the gang in Cupertino. The world's No 1 electronics brand's stock is at a record high that analysts say will continue to rally throughout 2011 due to increasing global demand for the iPad. But there is a minor threat that the feel-good vibes of Apple's supernatural profits will be undermined by a different kind of report.

Released earlier this week, Workers as machines: military management in Foxconn is a critical evaluation of the company that manufactures iPhones and iPads, among other brands of gadgetry. Produced by the non-profit organisation Students and Scholars against Corporate Misbehaviour (Sacom), the report contains the findings of a four-month investigation of the working conditions at the Foxconn factories in Shenzhen and Hangzhou, where 17 workers killed themselves earlier this year, many of them by jumping out of factory windows.

In addition to the numerous issues explored in the report, which include allegations of illegal labour practices and unsafe facilities, it contends that Foxconn workers are subject to a management culture of "absolute obedience". According to the report, factory employees are disciplined if they fail to make production quotas or spend too much time in the bathroom. Punishment may take the form of public humiliation, confession or the rote transcription of quotes from Foxconn chairman (and Taiwan's richest man) Terry Guo, which include such gems as: "Hungry people have especially clear minds" and "a harsh environment is a good thing".

The report's descriptions of the Foxconn work and dormitory environment reads like an Orwellian laundry list. Those who don't return to their room before the 23:30 curfew are forced to "volunteer" for janitorial duty. Workers are not permitted to talk, nap, laugh or stretch while they work. Those required to stand while working are instructed to stand like a soldier. Foxconn security guards, who some workers consider more of a private police force, often insult and sometimes physically attack the workers. The report also claims that the promises of a pay raises made after the suicides failed to materialise, or were offset by other deductions.

Specific to Apple's recent fourth-quarter triumph, the report quotes a Foxconn engineer who states that during the production of the first-generation iPad, workers had to work 12 hours per day and were only permitted to rest every 13th day.

In response to the report, Foxconn has stated that it "strongly and categorically rejects" the allegations and that "Foxconn is certainly not perfect, but we take our responsibility to our employees very seriously and we are committed to giving each and every one of our more than 937,000 employees in China a safe and positive working environment and compensation and benefits that are competitive with all of our industry peers."

Meanwhile, when contacted Apple maintained that they are "committed to ensuring the highest standards of social responsibility throughout our supply base". Jobs has yet to personally comment on the Sacom report, but when news of the suicides surfaced in June, he insisted that Foxconn was "not a sweatshop" and that "Apple does one of the best jobs of any company understanding the working conditions of our supply chain".

Although a number of electronics firms outsource their production to Foxconn, those protesting the conditions at the company are focusing their ire on Apple. In their report, Sacom point out that the Apple supplier code of conduct was designed to protect workers from the very abuse they have witnessed, but claims that the majority of Foxconn workers have no knowledge that such a code exists.

The iPhone 4 currently retails at £599, but is estimated by iSupply, a technology research firm, to cost a mere $6.54 (£4.12) to manufacture - that is, put together - in China (the researchers estimate the cost of the components, which come from various sources, at a further $187.51). If, as Jobs has stated, Apple is indeed aware of the working conditions at Foxconn, and if the Sacom report is factual, then it's only fair to assume that Apple has taken a rather pragmatic position on its code of conduct and concluded that you can't make £16bn per quarter without crushing a few spirits.

Perhaps electronics consumers have simply come to accept the unsavoury side of outsourced mass production. As demonstrated by Banksy's recent Simpson's couch gag, the imagery of an Asian sweatshop is anything but shocking. It's been woven so tightly into the fabric of western economies that it's come to be expected.

• This article was amended on 29 October 2010. The original could have been read as suggesting that $6.54 was the cost of producing the iPhone 4. This has been clarified.

• The commissioning of this piece was originally suggested by eldorado99 in the You tell us thread