Question

In: Accounting

In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that...

In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel were inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in your report, one or more employees who perform inspections will likely lose their jobs.

Questions

  1. As a plant employee, what is your responsibility to report your findings to superiors?
  2. Should you attempt to determine if the redundancy is justified? Explain.
  3. What is your responsibility to the employees whose jobs will likely be lost by your report?
  4. What facts should you consider before making your decision to report or not?

Solutions

Expert Solution

ekkarill92 answered 10 months ago
Next > < Previous

Related Solutions

In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that...
In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel were inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in...
In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that...
In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel was inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in...
In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that...
In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel was inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in...
Explain how Morrison Pump Company could implement an activity-based costing (ABC) system. When you are deciding...
Explain how Morrison Pump Company could implement an activity-based costing (ABC) system. When you are deciding on a company to use, consider the costs and benefits in implementing an ABC system. In your post, provide some background information about your company. Explain what it produces and identify the activities that would drive costs. Discuss the cost pools that it would use. Recommend the process it would need to go through to implement ABC in the company. http://www.morrisonpump.com/
Mastery Problem: Activity-Based Costing (Advanced) Activity-Based Costing Traditionally, Overhead cost: Sometimes referred to as "factory overhead,"...
Mastery Problem: Activity-Based Costing (Advanced) Activity-Based Costing Traditionally, Overhead cost: Sometimes referred to as "factory overhead," this is an indirect cost that is not directly tied to the production of units, yet nonetheless must be built into product cost in order to appropriately price it. Examples are managerial salaries, rent expense, setup costs, and property taxes.overhead costs are assigned based arbitrarily on the rate of either Direct labor: This is a labor cost directly associated with the production of goods...
Dodo Inc., uses activity-based costing to determine product margins. In the first stage, the activity-based costing...
Dodo Inc., uses activity-based costing to determine product margins. In the first stage, the activity-based costing system allocates two overhead accounts--equipment depreciation and supervisory expense--to three activity cost pools--Machining, Order Filling, and Other--based on resource consumption. Data pertinnent to perform these allocations appears below: Overhead costs: Equipment depreciation $ 107,000 Supervisory expense $ 9,900 Distribution of Resource Consumption Across Activity Cost Pools: Activity Cost Pools Machining Order Filling Other Equipment depreciation 0.60 0.30 0.10 Supervisory expense 0.60 0.20 0.20 In...
What costs are affected by an Activity Based Costing system? By a Traditional Absorption Costing system?
What costs are affected by an Activity Based Costing system? By a Traditional Absorption Costing system?
What costs are affected by an Activity Based Costing system? By a Traditional Absorption Costing system?
What costs are affected by an Activity Based Costing system? By a Traditional Absorption Costing system?
You are part of a team responsible for implementing an activity-based costing system. Some of the...
You are part of a team responsible for implementing an activity-based costing system. Some of the members do not understand the steps involved in implementing such a system. Prepare a summary showing your team members the steps involved and a brief description of each step that are completed in the process.
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for...
Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,112,000, divided into four activities: fabrication, $576,000; assembly, $224,000; setup, $168,000; and inspection, $144,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 8,000 dlh 24,000 dlh 58 setups 100 inspections Bass boat 24,000 8,000 422 700 32,000 dlh 32,000 dlh...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT