Paper Topic:

CALCULATIONS AND EXPLAINATIONS

CALCULATIONS AND EXPLANATIONS

Case 5-1

1 .Does the shipping department manager have a legitimate complaint Explain

The shipping department has a legitimate complaint . For , all the other five shipping employees will be disheartened to learn that the three imported processing workers are paid higher by 6 per hour Further , the five shipping employees feel that the three imports are not as expert in the shipping department as they are . Evidently , the three shipping employees and the shipping department head feel that the three employees are just whiling away or playing

around in the shipping department because they unethically think they are special employees (Meigs ,1995

2 . Explain how management arrived at the budgeted figure of shipping wages

Budget for January to March ( 3 months

Budget

Rate Actual Labor

Persons Per hour Hours Cost

5 .00 9 .00 2 ,500 .00 22 ,500 .00

Specialist from processing 3 .00 9 .00 1 ,500 .00 13 ,500 .00 6 .00 1 ,500 .00 9 ,000 .00 15 .00

45 ,000 .00 Based on the above computation , the shipping department will not overshoot the budget of 36 ,000 if the three specialist workers from processing department have been paid based on the budgeted rate of only 9 per hour . The 36 ,000 budget is arrived at by adding the 22 ,500 for the five shipping employees and the 13 ,500 if the three specialist employees are paid at only 9 per hour . The difference of 6 per hour paid to the three specialist employees is the main reason why the budget of 36 ,000 has been overshot by 9 ,000

3 . how might the quarterly figure be reported to satisfy the shipping department manager

Budget for January to March ( 3 months

Budget

Rate Actual Labor

Persons Per hour Hours Cost

5 .00 9 .00 2 ,500 .00 22 ,500 .00

Specialist from processing 3 .00 9 .00 1 ,500 .00 13 ,500 .00

Charge to Shipping Department 36 ,000 .00

Charge to Processing Department 3 .00 6 .00 1 ,500 .00 9 ,000 .00 15 .00

45 ,000 .00 In to satisfy the shipping manager 's complaint , the above quarterly figure should be implemented . First , the shipping department should only be charged at 9 per hour . Consequently , this will make the other five employees happy . Also , the remaining 6 that will be paid to the three specialists should be hidden from the shipping department employees under the theory of CONFIDENTIALITY . For , the remaining 6 per hour should be charged back to the processing department . The theory behind this is that it will benefit the processing department if the 6 will be paid by processing department . For , there is a big possibility that the specialist may apply for another job in another company if the three specialists will be laid off during the first quarter

4 . how would you recommend that the problem be solved

My recommendation is that the answer in question no . 3 above should be implemented . This will make both...

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