Kaiser Company Just Hired Its Fourth Production Manager in Three

question 183

Essay

Kaiser Company just hired its fourth production manager in three years. All three previous managers had quit because they could not get the company above the break-even point, even though sales had increased somewhat each year. The company was operating at about 60 % of plant capacity. The flatware industry was growing, so increased sales were not out of the question.
I. R. Thinking took the job as manager of the production division with a very attractive salary package. After interviewing for the position, he proposed a salary and bonus package that would give him a very small salary but a large bonus if he took the operating income (using absorption costing) above the breakeven point during his very first year.
Required:
What do you think Mr. Thinking had in mind for increasing the company's operating income?

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Definitions:

Growth Hormone

A protein-based hormone secreted by the pituitary gland that stimulates growth, cell reproduction, and regeneration in humans and other animals.

Dwarfism

A condition characterized by short stature, often resulting from genetic or medical conditions affecting bone growth.

Graves' Disease

An autoimmune disorder that leads to an overactive thyroid gland, causing a variety of symptoms including anxiety, weight loss, and eye problems.

Cushing's Syndrome

A condition caused by prolonged exposure to high levels of cortisol, leading to symptoms such as weight gain and high blood pressure.