Eiger Manufacturing Manufactures Circuit Boards for Computer-Controlled Appliances for the Home

question 24

Essay

Eiger Manufacturing manufactures circuit boards for computer-controlled appliances for the home. The sales have been very volatile sometimes stressing the plant's capacity and sometimes depressingly slow. During a recent slow period Nathan Jones a production supervisor complained to Janet Smith accounting manager about the flexible budget.
"I try as hard as I can to meet the budget" he says "and then I find out that just meeting the budget's not good enough. Last month when we sold 8000 units I was $10000 under my budget and then you all blow me out of the water with your report that I actually was $5000 over because sales were slow. I thought this responsibility accounting business was supposed to mean we are held accountable just for things we can control. How do we control sales? At the beginning of the year you gave us all targets. Mine says that for an average month of 10000 unit sales I should spend about $82000. I spend less and get an unfavorable budget report. What gives?"
Required:
Write a short memo to respond to Mr. Jones.

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Definitions:

Collaborative Setting

An environment where individuals work together as a team to share knowledge, ideas, and work towards a common goal.

Synchronous

Occurring or operating at the same time; in the context of communications or technology, it refers to processes that happen in real-time.

Asynchronous

Pertaining to processes or events that do not occur at the same time or speed.

Collaborative Teams

Groups of individuals working together in a cooperative manner towards a common goal or objective.