Question: =+ (d) Assume that the department manager performs the timekeeping function for this manufacturing department. From time to time, analysis of overhead and direct labour

(d) Assume that the department manager performs the timekeeping function for this manufacturing department. From time to time, analysis of overhead and direct labour variances have shown that the department manager has deliberately mis-classified labour hours (e.g., listed direct labour hours as indirect labour hours and vice versa), so that only one of the two labour variances is unfavourable. 1t is not feasible economically to hire a separate time-keeper. What should the company do, if anything, to resolve this problem?

(From: Horngren, 1982.)

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