Home » Should we evaluate a manager’s performance on the basis of controllable or non-controllable costs? Why? Custom Essay

# Should we evaluate a manager’s performance on the basis of controllable or non-controllable costs? Why? Custom Essay

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Should we evaluate a manager’s performance on the basis of controllable or non-controllable costs? Why?
Is it ethical for a manager that is responsible for overseeing a sales department whose compensation is based on the level of sales to be involved in the preparation of the sales reports? Why or why not? What internal controls should be in place in this situation to avoid fraud from occurring?
Part 2
Listed here are the total costs associated with the production of 15,000 Blu-ray discs (BDs) manufactured by Nextgen. The BDs sell for \$18.00 each. (please look at the attachment as it will list the chart correctly)
Cost By Behavior Cost by Function
Costs Variable Fixed Product Period
Plastic for BD’s – \$1500…………………………..….\$1500 \$1,500
Wages of assembly workers-\$30,000…………..
Cost of factory rent – \$6,750……………………….
Systems staff salaries – \$15,000………………….
Labeling (12,000 outsourced) – \$3,750…………
Cost of office equipment rent – \$1,050…………
Upper management salaries – \$120,000……….
Annual fixed fee for cleaning service – \$4,520..
Sales commissions – \$0.50 per BD………………..
10. Machinery depreciation, straight-line – \$18,000.
Required:
Classify each cost and its amount as (a) either variable or fixed and (b) either product or period. (The first cost is completed as an example)
Compute the manufacturing cost per BD.

Analysis Component:

Assume that 10,000 BDs are produced in the next year. What do you predict will be the total cost of plastic for the BDs and the per unit cost of the plastic for the BD’s? Explain.
Assume that 10,000 BDs are produced in the next year. What do you predict will be the total cost of factory rent and the per unit cost of the factory rent? Explain.

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