Question

BTN 17-3 In conducting interviews and observing factory operations to implement an activity-based costing system, you determine that several activities are unnecessary or redundant. For example, warehouse personnel were inspecting purchased components as they were received at the loading dock. Later that day, the components were inspected again on the shop floor before being installed in the final product. Both of these activities caused costs to be incurred but were not adding value to the product. If you include this observation in your report, one or more employees who perform inspections will likely lose their jobs.

Required

1.As a plant employee, what is your responsibility to report your findings to superiors?

2.Should you attempt to determine if the redundancy is justified? Explain.

3.What is your responsibility to the employees whose jobs will likely be lost because of your report?

4.What facts should you consider before making your decision to report or not?

Answer 1

1. As an employee this is one's responsibility to report to superiors for the purpose of taking decision at right time in the interest of the organisation.

2. I will attempt to study the total process and will explain it to the superiors for their understandingg.

3. Here my responsibility is to study activity based costing and when i found there are certain redundancies, it is my duty to report to the superior officers for correction in the interest of the company. Also here the intention is not to remove the employee, we can make use of his services elsewhere in the process of operations or if redundant shall be recommended for removal.

4. Before reporting: Complete study of process currently happening and findings from the process. What recommendations that we are proposing to implement. And how will it save costs in the Company.