Tilly Issac is the assistant controller for Tagwell Corporation, a leading pro-

Question

Tilly Issac is the assistant controller for Tagwell Corporation, a leading pro- ducer of home appliances. Her friend Zack Marsh is the supervisor of the firm%u2019s Cookware Department. Marsh has the authority to decide whether parts are pur- chased from outside vendors or manufactured in his department. Issac recently conducted an internal audit of the parts being manufactured in the Cookware Department, including a comparison of the prices currently charged by vendors for similar parts. She found more than a dozen parts that could be purchased for less than they cost the company to produce. When she approached Marsh about the situation, he replied that if those parts were purchased from outside ven- dors, two automated machines would be idle for several hours a week. Increased machine idle time would have a negative effect on his performance evaluation and could reduce his yearly bonus. He reminded Issac that he was in charge of the decision to make or purchase those parts and asked her not to pursue the matter any further. What should Issac do in this situation? Discuss her options.

Explanation / Answer

isaac shoul go through the internal audit report submitted and review its conclusions and accounting methods .he should propose for buying products if cost of buying them from outside is strictly less than cost of producing it internally . and decesion taken should not have any impact on yearly bonus and performanc e of company

so what isaac can do is consult the employees of organization discuss with them the pros and cons of taking the decesion and implement a decesion if majority is willing to agree with decesion

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