Question

You are an accounting manager at a Benefit Corporation tasked with the following: The production manager just called you to say something is awry with the costs involved with their "green" detergent production. She asks why workers are using more materials than usual in the production of the detergent. In addition, she wants to know why the direct labor cost has increased in comparison with previous months. • What documents and data might you want to examine and why? • Discuss the potential issues that might prevent the company from buying cheaper materials. • Also, discuss the potential issues that a manager confronts when he/she needs to incur more direct labor costs in order to comply with the production deadlines

Answer 1

Answer:

What documents and data might you want to examine and why?

1. Workers Clocking Sheets - To check Accuracy of wages calculation

2. Workers Master files - To extract the Hourly rate for wages calculation

3. Production report - To examine where variances lie.

Discuss the potential issues that might prevent the company from buying cheaper materials

1. Limited number of suppliers hence higher price.

2. The need to use quality materials hence expensive materials

3. The Economy has price fluctuations hence no cheap materials

Issues that a manager confronts when he/she needs to incur more direct labor costs in order to comply with the production deadlines

1. The idea of working extra hours may not be welcome amongst workers

2. The idea of increasing hourly wage rate may not be welcome with the finance team.

Explanation:

The part required by the questions are discussed above.