The manager of the manufacturing unit of a company is responsibie for the costs of the manufecturing unit. The president is in the process of declding whether to evaluate the manager at the manufacturing unit by the average cost per unit or the varlable cast per unit Quality and Urmiely delivery would be used in corsuncton with the cust meesure lo rewerd the maneger Required: a. What probiems are associated with using the average cost per unit as a pertormance measure b. What problems are associated with using the variable cost per unt as a performance measure?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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The manager of the manufacturing unit of a company is responsibie for the costs of the manufacturing unit. The president is in the process of
deciring whether to evaluate the manager at the manufacturing unit by the average cost per unit or the vartable cast per unit Quality and
umely delivery would be used in coruncion with the cust meesure lo rewerd the maneger
Required:
a. What problems are associated with using the average cost per unit as a pertormance measure
b. What problems are associated with using the variable cost per unt as a performance measure?
Transcribed Image Text:The manager of the manufacturing unit of a company is responsibie for the costs of the manufacturing unit. The president is in the process of deciring whether to evaluate the manager at the manufacturing unit by the average cost per unit or the vartable cast per unit Quality and umely delivery would be used in coruncion with the cust meesure lo rewerd the maneger Required: a. What problems are associated with using the average cost per unit as a pertormance measure b. What problems are associated with using the variable cost per unt as a performance measure?
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