Anthony Bennett is the manufacturingproduction supervisor fo

Anthony Bennett is the manufacturingproduction supervisor for Green Bottle Works (GBW), a company that manufacturesstainless-steel water bottles. Trying to explain why he did not get theyear-end bonus that he had expected, he told his wife, “This is the dumbestplace I ever worked. Last year the company set up this budget assuming it wouldsell 250,000 units. Well, it sold only 240,000. The company lost money and gaveme a bonus for not using as much materials and labor as was called for in thebudget. This year, the company has the same 250,000 units goal and it sells260,000. The company’s making all kinds of money. You’d think I’d get this bigfat bonus. Instead, management tells me I used more materials and labor thanwas budgeted. They said the company would have made a lot more money if I’dstayed within my budget. I guess I gotta wait for another bad year before I geta bonus. Like I said, this is the dumbest place I ever worked.” GBW’s masterbudget and the actual results for the most recent year of operating activityfollow. Chart is included on attachmenta. Did GBW increase unit sales bycutting prices or by using some other strategy?b. Is Mr. Bennett correct in hisconclusion that something is wrong with the company’s performance evaluationprocess? If so, what do you suggest be done to improve the system? c. Prepare a flexible budget andrecompute the budget variances. d. Explain what might have causedthe fixed costs to be different from the amount budgeted. e. Assume that the company’smaterials price variance was favorable and its materials usage variance wasunfavorable. Explain why Mr. Bennett may not be responsible for thesevariances. Now, explain why he may have been responsible for the materialsusage variance

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