Marble company manufactures and sells furniture for luxury hotels. The company also hired a new production...
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Marble company manufactures and sells furniture for luxury hotels. The company also hired a new production manager, Mr, Ibrahim, who is expected to reduce manufacturing costs. Marble company has a large plant that is highly automated. In addition, it has a 20 service trucks, and a supply warehouse that serves both the maintenance workers (who need spare parts to fix various types of furniture) and the manufacturing plant. The maintenance workers used the trucks to reach the customer sites and to the service company's products. Marble company supplies furniture parts, owns the trucks, and pays for the diesel. 1. Mr. Ibrahim is not satisfied with the equipment's that the purchasing manager has been acquiring. In September, he decided to stop requesting ordering from the warehouse and started acquiring them directly from a different equipment manufacturer. Budgeted materials costs in September are less than actual materials costs. (1.5 marks) 2- Budgeted overhead costs for September are substantially less that actual overhead costs. Investigation shows that utility expenses increased substantially during the month of September. (1.5 marks) 3- Marble's maintenance workers are paid a fixed amount daily ($100), regardless of their educational background or experience with the company. According to the maintenance manager, the productivity of new workers is 20% lower than that of the senior workers. (1.5 marks) 4- Diesel expenses for each truck are estimated based on the amount of driving anticipated for the month and the service area of the truck. Monthly Diesel expenses for September are much higher than budgeted. Investigation reveals that the drivers have been used the trucks for their own private benefits at the expense owners. (1.5 marks) Instruction: For each of the 4 cases listed above, identify where (that is, with whom) (a) controllability lie and (b) responsibility. Recommend actions to mitigate the issue or to enhance the situation. Marble company manufactures and sells furniture for luxury hotels. The company also hired a new production manager, Mr, Ibrahim, who is expected to reduce manufacturing costs. Marble company has a large plant that is highly automated. In addition, it has a 20 service trucks, and a supply warehouse that serves both the maintenance workers (who need spare parts to fix various types of furniture) and the manufacturing plant. The maintenance workers used the trucks to reach the customer sites and to the service company's products. Marble company supplies furniture parts, owns the trucks, and pays for the diesel. 1. Mr. Ibrahim is not satisfied with the equipment's that the purchasing manager has been acquiring. In September, he decided to stop requesting ordering from the warehouse and started acquiring them directly from a different equipment manufacturer. Budgeted materials costs in September are less than actual materials costs. (1.5 marks) 2- Budgeted overhead costs for September are substantially less that actual overhead costs. Investigation shows that utility expenses increased substantially during the month of September. (1.5 marks) 3- Marble's maintenance workers are paid a fixed amount daily ($100), regardless of their educational background or experience with the company. According to the maintenance manager, the productivity of new workers is 20% lower than that of the senior workers. (1.5 marks) 4- Diesel expenses for each truck are estimated based on the amount of driving anticipated for the month and the service area of the truck. Monthly Diesel expenses for September are much higher than budgeted. Investigation reveals that the drivers have been used the trucks for their own private benefits at the expense owners. (1.5 marks) Instruction: For each of the 4 cases listed above, identify where (that is, with whom) (a) controllability lie and (b) responsibility. Recommend actions to mitigate the issue or to enhance the situation.
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ANSWER cage 1 contadlability lie with purchasing manager Responsibily with my IBRAHIM RECOMMEND ... View the full answer
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
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