You have been asked to investigate some cost problems in the Assembly Department of JeVo Electronics Inc.,
Question:
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, youve got to understand what its been like in this department recently. Lately, it seems no matter how hard we try, we cant seem to make the standards. Im not sure what is going on, but weve been having a lot of problems lately.
Q: What kind of problems?
A: Well, for instance, all this quarter weve been requisitioning purchased parts from the material storeroom, and the parts just didnt fit together very well. Im not sure what is going on, but during most of this quarter weve had to scrap and sort purchased partsjust to get our assemblies put together. Naturally, all this takes time and material. And thats not all.
Q: Go on.
A: All this quarter, the work that weve been receiving from the Fabrication Department has been shoddy. I mean, maybe around 20% of the stuff that comes in from Fabrication just cant be assembled. The fabrication is all wrong. As a result, weve 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.
Step by Step Answer:
Accounting
ISBN: 978-0324188004
21st Edition
Authors: Carl s. warren, James m. reeve, Philip e. fess