10 Nov Chad Bentley, president of Sabrin Corporation, eva
Chad Bentley, president of Sabrin Corporation, evaluated the performance report of the company s production department. Mr. Bentley was confused by some arguments presented by Jeannette Dolan, the production manager. Some relevant data follow: Variances Amount Materials usage variance . $240,000 U Materials price variance . 196,000 F Labor price variance 38,000 F Labor usage variance . 138,000 U Volume variance 300,000 U Ms. Dolan argued that she had done a great job, noting the favorable materials price variance and labor price variance. She argued that she had no control over factors causing the unfavorable variances. For example, she argued that the unfavorable materials usage variance was caused by the purchasing department s decision to buy substandard materials that resulted in a substantial amount of spoilage. Moreover, she argued that the unfavorable labor usage variance resulted from the substantial materials spoilage which in turn wasted many labor hours, as did the hiring of under qualified workers by the manager of the personnel department. Finally, she said that the sales department s failure to obtain a sufficient number of customer orders really caused the unfavorable volume variance. Required a. What would you do first if you were Chad Bentley? b. Did Ms. Dolan deserve the cr
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