The marketing manager of Gilroy Incorporated accepted a rush order for a non-stock item from a...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The marketing manager of Gilroy Incorporated accepted a rush order for a non-stock item from a valued customer. The manager filed the necessary paperwork with the production department, and a production manager did the same with purchasing for needed raw materials. Unfortunately, a purchasing clerk temporarily lost the paperwork; by the time it was found, it was too late to order from Gilroy's regular supplier. A new supplier was located that quoted a very attractive price. The materials soon arrived and were found to be of poor quality, thus giving rise to a favourable materials price variance, an unfavourable materials quantity variance, and an unfavourable labor efficiency variance. These latter two variances, based on normal practice, appeared on the production manager's performance report for the period just ended. REQUIRED: 1. Given that the company uses a responsibility accounting system, should the production manager be penalized for poor performance? Briefly discuss, keeping in mind that a production manager is generally in a very good position to control material usage and labor efficieney. 2. Should anything be done to correct the situation? If "yes," briefly explain. The marketing manager of Gilroy Incorporated accepted a rush order for a non-stock item from a valued customer. The manager filed the necessary paperwork with the production department, and a production manager did the same with purchasing for needed raw materials. Unfortunately, a purchasing clerk temporarily lost the paperwork; by the time it was found, it was too late to order from Gilroy's regular supplier. A new supplier was located that quoted a very attractive price. The materials soon arrived and were found to be of poor quality, thus giving rise to a favourable materials price variance, an unfavourable materials quantity variance, and an unfavourable labor efficiency variance. These latter two variances, based on normal practice, appeared on the production manager's performance report for the period just ended. REQUIRED: 1. Given that the company uses a responsibility accounting system, should the production manager be penalized for poor performance? Briefly discuss, keeping in mind that a production manager is generally in a very good position to control material usage and labor efficieney. 2. Should anything be done to correct the situation? If "yes," briefly explain.
Expert Answer:
Answer rating: 100% (QA)
1 It is to be noted that unfavourable material variance is happened due to the w... View the full answer
Related Book For
Statistics for Business and Economics
ISBN: 978-0132930192
8th edition
Authors: Paul Newbold, William Carlson, Betty Thorne
Posted Date:
Students also viewed these accounting questions
-
The marketing manager of a large supermarket chain would like to use shelf space to predict the sales of pet food. A random sample of 12 equal-sized stores is selected, with the following results...
-
The marketing manager of a large super market chain has the business objective of using shelf space most efficiently. Toward that goal, she would like to use shelf space to predict the sales of a...
-
The marketing manager of a well-known automobile engine additive suspects that the use of an in-store display affects the price elasticity of his product. Specifically, he suspects that the presence...
-
Using the DJIA data in Problem 5-39, use exponential smooth with trend adjustment to forecast the opening DJIA value for 2014. Use α = 0.8 and β = 0.2. Compare the MSE for...
-
Explain why each is likely to occur.
-
The 0.75-kg bob of a pendulum is fired from rest at position A by a spring which has a stiffness of k = 6 kN/m and is compressed 125 mm. Determine the speed of the bob and the tension in the cord...
-
71. Pam, Sergei, and Mercedes are all one-third partners in the capital and profits of Oak Grove General Partnership. Partnership debt is allocated among the partners in accordance with their capital...
-
Would Aimer likely be able to avoid reinstating Saldona under the key employee exception? Why or why not? Rick Saldona began working as a traveling salesperson for Aimer Winery in 1979. Sales...
-
Evans Products uses a process costing system with two processing departments: the Mixing Department and the Finishing Department. In June, unit costs incurred by the Mixing Department amounted to...
-
Dimanche uses labor hours to allocate costs from Cost Pool #1, and machine hours to allocate costs from Cost Pool #2. The following jobs were started during the year: Job A1 Prime costs $20,000 Labor...
-
Help Save Exercise 7-4 (Algo) Direct write-off method LO P1 Dexter Company uses the direct write-off method. March 11 Dexter determines that it cannot collect $9,700 of its accounts receivable from...
-
Units processed during September for material and conversion. Ask an instructor lock lock lock A 3 A copy Determine the cost per equivalent unit for material and conversion cost combined. copy...
-
12% of all college students volunteer their time. Is the percentage of college students who are volunteers different for students receiving financial aid? Of the 338 randomly selected students who...
-
Mervon Company has two operating departments: mixing and bottling. Mixing has 3 3 0 employees and Bottling has 2 2 0 employees. Indirect factory costs include administrative costs of $ 1 8 2 , 0 0 0...
-
XP Ltd. is a manufacturing company with high stock requirements. Management are currently considering their stockholding policy. The following information is available for one stock item, material...
-
Process Costing: weighted average method Required: make a cost of production report in good form. Cost of Production Report-Weighted Average First Dept- Gem Company applies 100% of materials at the...
-
Important purposes/uses for accounting information include decision support attention directing all the listed answers are correct score-keeping
-
d. The characteristic equation of a control system is given by s+2s+8s+12s+20s+16+16=0. Determine the number of the roots of the equation which lie on the imaginary axis of s-plane
-
A notebook computer dealer mounts a new promotional campaign. Purchasers of new computers may, if dissatisfied for any reason, return them within 2 days of purchase and receive a full refund. The...
-
In a large corporation, 80% of the employees are men and 20% are women. The highest levels of education obtained by the employees are graduate training for 10% of the men, undergraduate training for...
-
Doctors are interested in the possible relationship between the dosage of a medicine and the time required for a patient's recovery. The following table shows, for a sample of 10 patients, dosage...
-
Account for trading securities. (p. C-5) AppendixLO1
-
Kate Beckwith expects to invest $10,000 annually that will earn 8%. How many annual investments must Beckwith make to accumulate $303,243 on the date of the last investment? (Use Table B.4.)...
-
Account for available-for-sale securities. (p. C-6) AppendixLO1
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App