Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781119034681
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter 11, Problem 11.7BYP
At Symond Company production workers in the Painting Department are paid on the basis of productivity. The labor time standard for a unit of production is established through periodic time studies conducted by Douglas Management Consultants. In a time study the actual time required to complete a specific task by a worker is observed. Allowances are then made for preparation time, rest periods, and cleanup time. Bill Carson is one of several veterans in the Painting Department.
Bill is informed by Douglas that he will be used in the time study for the painting of a new product. The findings will be the basis for establishing the labor time standard for the next 6 months. During the test, Bill deliberately slows his normal work pace in an effort to obtain a labor time standard that will be easy to meet. Because it is a new product, the Douglas representative who conducted the test is unaware that Bill did not give the test his best effort.
Instructions
(a) Who was benefited and who was harmed by Bill's actions?
(b) Was Bill ethical in the way he performed the time study test?
(c) What measure(s) might the company take to obtain valid data for setting the labor time standard?
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Chapter 11 Solutions
Managerial Accounting: Tools for Business Decision Making
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