Russell Marks shook his head in disbelief as he and operations manager Tom Hanover reviewed the month's
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One batch of products had to be thrown away because of materials defects that had been discovered after all the assembly was complete. Tom had been working hard to keep the plant running smoothly, but lately everything had gone wrong. And he couldn't seem to find the cause.
Russell interrupted Tom's thoughts. "Thank goodness for the $400,000 favorable direct materials price variance Brian generated by purchasing materials from that new supplier he found. Without that, we would have been in even worse shape. You know, he's been saving us a lot of money over the last several months by seeking out new suppliers. Maybe I should give him a bonus."
Required
a. How might Tom respond to Russell?
b. Should Russell investigate further before he awards Brian a bonus? Why or why not?
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