Carlson Manufacturing Is a Producer of Plastic Bottles for Bottled

question 49

Essay

Carlson Manufacturing is a producer of plastic bottles for bottled water companies. In July of this year, the plant manager switched to a new supplier of raw materials. The materials have a lower cost, and because of their chemical composition, more bottles can be made per hour. The downside of this faster production is that more bad, unusable bottles result. Below are the production data for the two months before and after the switch of suppliers.

a. Compute bad units as a percentage of total production for each month. Round answers to two decimal places.
b. What does the plant manager need to consider in determining whether or not to continue buying raw material from the new supplier?

Prepare journal entries for standard cost variances and understand their financial implications.

Analyze the effects of capacity levels on budgeting and variance analysis.

Understand the concept of overhead variances, including controllable and volume variances.

Identify causes of variances and their implications for management decision-making.

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Definitions:

Evaluator's Observation

The process by which an evaluator consciously watches, records, and assesses someone's performance, skills, behaviors, or outcomes.

Performance Appraisal System

A structured process by which employee performance is evaluated and feedback is provided.

Reliable

The quality of being consistently good in performance, allowing someone or something to be trusted.

Scientific Management

Uses systematic study of job components to develop practices to increase people’s efficiency at work.