Jeff howell is a production manager at a mental fabricating

Assignment Help Accounting Basics

Reference no: EM13598292

Jeff Howell is a production manager at a mental fabricating plant. Last night he read an article about a new piece of equipment that would dramatically reduce his division's cost. Jeff was very excited about the prospect, and the first thing he did this morning was to bring the article to his supervisor, Nathan Peas, the plant manager. The following conversation occurred:

Jeff: Nathan, I thought you would like to see this article on the new PDD1130; they've made some fantastic changes that could save us millions of dollars.
Nathan: I appreciate your interest Jeff, but I actually have been aware of the new machine for two months. The problem is that we just bought a new machine last year. We spent $2 million on that machine, and it was supposed to last us 12 years. If we replace it now we would have to write its book value off of the books for a huge loss. If I go to top management and now and say that I want a new machine, they will fire me. I think we should use our existing machine for a couple of years, and then when it becomes obvious that we have to have a new machine, I will make the proposal.

Task;
Jeff just completed a course in managerial accounting, and he believes that Nathan is making a big mistake. Write a memo from Jeff to Nathan explaining Nathan's decision-making error.

Reference no: EM13598292

Questions Cloud

The requirement that only transaction data capable of being : 1- the requirement that only transaction data capable of being expressed in terms of money be included in the

Describe an example of how an unfavorable variance between : describe an example of how an unfavorable variance between actual and budget amounts in a fixed master budget can

Robert buey became chief executive officer of phelps : robert buey became chief executive officer of phelps manufacturing two years ago. at the time the company was reporting

Compute the cost per unit of the fixed manufacturing : josh corporation produces industrial robots for high-precision manufacturing. the following information is given for

Jeff howell is a production manager at a mental fabricating : jeff howell is a production manager at a mental fabricating plant. last night he read an article about a new piece of

Pro sports inc manufactures basketballs for the national : pro sports inc. manufactures basketballs for the national basketball association. for the 6 months of 2008 the company

Audio works inc warrants its products for one year the : audio works inc. warrants its products for one year. the estimated product warranty is 2 of sales. assume that sales

Suppose asset a has an expected return of 10 and a standard : suppose asset a has an expected return of 10 and a standard devation of 20. asset b has expected return of 16 and a

The 2011 federal income tax rate for a single individual is : the 2011 federal income tax rate for a single individual is 10 of the taxable income amount over 0 15 of the amount

User Account

All Pages