Five Star Tools is a small family-owned firm that manufactures diamond-coated cutting tools (chisels and saws) used
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Currently, the chemical bath department is a bottleneck due to intermittent failures related to an antiquated dipping tank. The result is that the department can process only 600 items per hour from the cutting department rather than the 700 items per hour that are normally processed.
Required
Explain why the cutting department should cut back production from 700 items per hour to 600. Further, explain why if the cutting department does cut back, as it should, it is likely to have an unfavorable labor efficiencyvariance.
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