Setting Productivity Standards. Anvil Inc. intends to expand its Punch Press Department with the purchase of three new presses from Presco Inc. Mechanical stud¬ ies indicate that for Anvil’s intended use, the output rate for one press should be 1,000 pieces per hour. The com¬ pany has similar presses now in operation that average 600 pieces per hour. This average is derived from the individual outputs as shown in the table that follows. LO3 Hourly Output Worker (In Pieces)

Allen, W 750 Miller,G. 750 Salermo,J. 600 Velasquez,E. 500 Underwood,P. 550 Keppinger,J. 450 Total. 3,600 Average hourly output. 600 Anvil’s management also plans to institute a standard cost accounting system in the very near future. The company’s engineers are supporting a standard based on 1,000 pieces per hour; the Accounting Department, a standard based on 750 pieces per hour; and the Punch Press Department supervisor, a standard based on 600 pieces per hour.

Required:

(1) Specify arguments that could be used by each pro¬ ponent.

(2) Decide which alternative best reconciles the needs of cost control and employee motivation. Explain.

(ICMA adapted)