Sound Dynamics, Inc.(Mcs Case) Essay Example

office explaining her reasoning. In response, the manufacturing office sent a memorandum to Ms. Larson in late July, outlining their disagreement with her conclusions and providing supporting analysis.

Questions: 1. Can you reconcile the figures mentioned in Appendices A, B, and C of the memos?

Prepare a brief summary that reconciles the differences. Of the disputed differences, how many people and how much money is attributable to alleged workload increase? To salary mix change? To unanticipated one-time computerization implementation costs? " Having struggled with Question 1 for a while, what do you think is really going on in the memos?

1. Based on your analysis of the situation, what is a ''reasonable'' budget for the department for 1990?
2. What should Ms. Larson do now?
3. What lessons for effective controllership should we draw from this case? Answers: 1. According to the Appendixes A the numbers of personnel are Department

According to the Manufacturing office if the total system run fully manually they will need another more 5 personnel and that will cost about $94,000 for operating expenses i. e. the total no of personnel then will be 54+5=59.

Summary: The consolidated budget data for San Remo and Reichard Subsidiary of Sound Dynamics, Inc. indicates a total estimated budget decrease of $184,000. This decrease is attributed to the elimination of duplicate jobs, which led to a reduction in the number of salaried personnel by 12. Additionally, the implementation of computerization resulted in a decrease of 11 personnel and a decline in the previous year's budget by $138,000. However, an increase

in workload from 10,200 to 16,400 necessitates hiring an additional 12 personnel for the manufacturing office at an extra cost of $390,000.

Due to a salary mix, the average Annual Salary increased by $14,218 to $15,914, resulting in a budget increase of $91560. The implementation of computerization led to a decrease in the total operation cost by approximately $103,172 in 1990 and $98,231 in 1991. The cost of implementing the computerized operations control system is estimated to be $112.

After my observation, I believe that Memorandum A and Memorandum C provide more detailed and concise explanations compared to Memorandum B. Memorandum A provides detailed information about workload and clearly explains the basis for recommending an additional 12 personnel in a specific department. On the other hand, in Memorandum B, the Financial Controller used a simplistic calculation (39-38) for increased personnel which caused confusion.

The manufacturer's office in Appendix C clarifies that the additional 12 personnel are specifically for handling increased workload. They also provide justification for requiring a total of 17 personnel if they switch to an annual system, citing factors such as workload content and volume adjustment, unavoidable increase in salary mix, nonrecurring cost penalties, functional improvements and advantages, and association with integrated data processing.

The reasonable

After reviewing the situation, Ms. Larson has three possible options: (1) agreeing with the manufacturing director's standpoint for potential approval from the managing director; (2) continuing to oppose the request which would lead to a decision by the managing director considering both Ms. Larson's and the manufacturing office's views; or (3) responding with further analysis in hopes of convincing the manufacturing office about her position's validity. Personally, I believe choosing the third

option would be her best choice.