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R. B. Patrick Company manufactures a high-tech component that passes through two production processing departments, Molding and Assembly. Department managers are partially compensated on the basis of units of products completed and transferred out relative to units of product put into production. This was intended as encouragement to be efficient and to minimize waste.
Sue Wooten is the department head in the Molding Department, and Fred Barando is her quality control inspector. During the month of June, Sue had three new employees who were not yet technically skilled. As a result, many of the units produced in June had minor molding defects. In order to maintain the department's normal high rate of completion, Sue told Fred to pass through inspection and on to the Assembly Department all units that had defects nondetectable to the human eye. "Company and industry tolerances on this product are too high anyway," says Sue. "Less than 2% of the units we produce are subjected in the market to the stress tolerance we've designed into them. The odds of those 2% being any of this month's units are even less. Anyway, we're saving the company money."Instructions
(a) Who are the potential stakeholders involved in this situation?
(b) What alternatives does Fred have in this situation? What might the company do to prevent this situation from occurring?
Which of the following will cause income determined with absorption costing to be higher than income determined with direct costing - An excess of cost of goods manufactured over cost of goods sold for the period represents
Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year.
Create a production budget and estimate the materials, labor, and overhead costs for year 2 - Alloy and Steel inventories will not change. Sales are roughly uniform over the year.
What is meant by the terms relevant and irrelevant costs and revenues in Strategic Management Accounting decision making? Include several small numerical examples in your answer.
The 2007 and 2008 balance sheets for Alan Jack and Sons showed net accounts receivable of $10,000 and $14,000, respectively, and inventory of $8,000 and $6,000, respectively. Their 2008 income statement showed net sales of $109,500 and cost of goo..
Depreciation reported on the tax return exceeded depreciation reported on the income statement by $128,000. This difference will reverse in equal amounts of $32,000 over the years 2015-2018. Interest received on municipal bonds was $11,600.
How does the firm use "Cost-Volume-Profit Analysis" to assess performance? How would you use such a system to measure how costs change as production changes? How do you develop a "break even analysis" for a given firm and how would you use it?
floyd a cash basis taxpayer sold land in which he had a basis of 10000 for 100000. he received 25000 on 1st january of
Evaluate the maximum profits that Greentown can earn and the customer mix and quantity by which that profit will be achieved.
problem 1leisure attire corporation discontinued princess fashions its whole line of childrens clothing in november of
Total dollar of each of the elements of the accounting equation
Discuss the limits on cost recovery apply to listed property.
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