In conducting interviews and observing factory operations toimplement an activity-based costing system, you determine thatseveral activities are unnecessary or redundant. For example,warehouse personnel were inspecting purchased components as theywere received at the loading dock. Later that day, the componentswere inspected again on the shop floor before being installed inthe final product. Both of these activities caused costs to beincurred but were not adding value to the product. If you includethis observation in your report, one or more employees who performinspections will likely lose their jobs.
Questions
- As a plant employee, what is your responsibility to report yourfindings to superiors?
- Should you attempt to determine if the redundancy is justified?Explain.
- What is your responsibility to the employees whose jobs willlikely be lost by your report?
- What facts should you consider before making your decision toreport or not?
