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using the data, answer what is asked while showind detailed working with explanation. Q4. Sticky Wicket (SW) manufactures cricket bats using high quality wood and

using the data, answer what is asked while showind detailed working with explanation.

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Q4. Sticky Wicket (SW) manufactures cricket bats using high quality wood and skilled labour using mainly traditional manual techniques. The manufacturing department is a cost centre within the business and operates a standard costing system based on marginal costs. At the beginning of April 2010 the production director attempted to reduce the cost of the bats by sourcing wood from a new supplier and de-skilling the process a little by using lower grade staff on parts of the production process. The standards were not adjusted to reflect these changes. The variance report for April 2010 is shown below (extract). Adverse Favourable Variances Material price 5,100 Material usage 7,500 Labour rate 43,600 Labour efficiency 48,800 Labour idle time (note 1) 5,400 The production director pointed out in his April 2010 board report that the new grade of labour required significant training in April and this meant that productive time was lower than usual. He accepted that the workers were a little slow at the moment but expected that an improvement would be seen in May 2010. He also mentioned that the new wood being used was proving difficult to cut cleanly resulting in increased waste levels. Sales for April 2010 were down 10% on budget and returns of faulty bats were up 20% on the previous month. The sales director resigned after the board meeting stating that SW had always produced quality products but the new strategy was bound to upset customers and damage the brand of the business. Note 1: Idle time variance represents the change in actual idle time of labour compared with standard idle time Required: Assess the performance of the production director using all the information above taking into account both the decision to use a new supplier and the decision to de-skill the process.

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