You have been asked to investigate some cost problems in the Assembly Department of Digital Life Electronics

Question:

You have been asked to investigate some cost problems in the Assembly Department of Digital Life Electronics Co., a consumer electronics company. To begin your investigation, you have obtained the following budget performance report for the department for the last quarter:

The following reports were also obtained:

You also interviewed the Assembly Department supervisor. Excerpts from the interview follow.
Q: What explains the poor performance in your department?
A: Listen, you€™ve got to understand what it€™s been like in this department recently. Lately, it seems no matter how hard we try, we can€™t seem to make the standards. I€™m not sure what is going on, but we€™ve been having a lot of problems lately.
Q: What kind of problems?
A: Well, for instance, all this quarter we€™ve been requisitioning purchased parts from the material storeroom, and the parts just didn€™t fit together very well. I€™m not sure what is going on, but during most of this quarter we€™ve had to scrap and sort purchased parts€”just to get our assemblies put together. Naturally, all this takes time and material. And that€™s not all.
Q: Go on.
A: All this quarter, the work that we€™ve been receiving from the Fabrication Department has been shoddy. I mean, maybe around 20% of the stuff that comes in from Fabrication just can€™t be assembled.
The fabrication is all wrong. As a result, we€™ve had to scrap and rework a lot of the stuff.
Naturally, this has just shot our quantity variances.
Interpret the variance reports in light of the comments by the Assembly Departmentsupervisor.