Consider a strategic decision to reorganize manufacturing processes to reduce labor costs. Assume there are only two options: reorganize or not reorganize. The reorganization will eliminate the manual intervention in the process currently handled by 10 workers in the plant. Overall there are 40 employees in the factory, and 10 work on the manual process alone. Each employee earns $45,000 annually, and can be released with 30 days’ notice. The cost of additional equipment is $90,000 annually that would allow for the reorganization to occur.
For this assignment:
- Using the five-step decision making approach, outline your evaluation of this scenario and which decision should be taken for the company and why.
- Be sure you explain each step and the key variables used to determine the result on the step.
There are five main steps typically taken in the overall cost decision making process when using cost accounting data. These steps include:
Write a 1-2 page paper to address the evaluation and the results.
Please make this 1-2 pages and in APA format.
Please include a reference page and site sources within the paper.