6-18 Responsibility for Downtime Two of several departments performed successive operations in the manufacture of automobile frames.
Question:
6-18 Responsibility for Downtime Two of several departments performed successive operations in the manufacture of automobile frames. The frames were trans- ported from department to department via an overhead conveyor system that was paced in accordance with budgeted time allowances. Each department manager had responsibility for the budgeted costs and budgeted output of his department. On Tuesday morning Department D had some equipment failure that caused the manager to ask the manager of Department C to stop the conveyor system. The Department C manager refused, so workers in Department D had to remove the frames, stack them, and return the frames to the conveyor later when production resumed.
The manager of Department D was bitter about the incident and insisted that the manager of Department C should bear the related labor and overhead costs of $1,770. In contrast, the manager of Department C said, “I was just doing my job as specified in the budget.”
Step by Step Answer:
Accounting And Financial Management For Residential Construction
ISBN: 9780867187816
6th Edition
Authors: Emma Shinn