Costs Assignment

  1. As a result of Bill Peach personally expediting completion of Burnside’s order (Chapters 1-2), what additional costs did the plant and its operation incur for the order. What were the direct costs of Peach’s actions? What were the indirect costs of his actions? Explain your answers.

Costs Assignment: This was the answer

Bill Peach determined that the finishing of a product for another company was more important than the morality of his own employees. Some of the direct costs of Peach’s actions were that an employee quit as well as broke a machine. All other production was at a standstill while making this specific product which made employees inefficient. This can be directly traced because employees did something different from their usual routines which slow down the rest of production. Another large direct cost of this is the overtime cost of the hourly employees to be able to get the product out the door.

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Some of the indirect costs include upsetting the manager of the department, other employees may have felt unappreciated or unimportant. The machine was broken and it may affect is depreciation in the future. Indirectly other employees could feel less appreciated and more like pawns in the corporate structure. Employees that were not directly working on the production of Peach’s order request were less productive which was shown in the book when they were sitting and talking during work. This scenario proves that getting results is more important to the company than its employees. Employee morale arguably was affected the most. A company can recover from lost materials or money but loyal employees are nearly impossible to recover from. Due to the small city atmosphere, it will be difficult to find new employees because if a person had a bad experience then they’re very likely to tell others about it.

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