Question

Gary and Mary are production managers at GE. Production managers are rewarded with a bonus if the whole department exceeds their target profits for the year. Gary is asking Mary to change her estimate for the percentage of completion for the ending work in process. 1) Does Gary want to increase or decrease the original estimates

Answer 1

Gary wants Mary to increase the original estimates for the percentage of completion for the ending work in process to increase the department's chances of exceeding their target profits and receiving a bonus.

Step-by-step explanation:

In this case, Gary wants Mary to increase the original estimates for the percentage of completion for the ending work in process.

Since production managers at GE are rewarded with a bonus if the whole department exceeds their target profits for the year, Gary is trying to manipulate the estimates to make it more likely for the department to exceed their target profits. By increasing the original estimates for the percentage of completion, it can make it seem like the department is closer to achieving their goals and increase their chances of receiving a bonus.

Answer 2

Gary wants to increase the original estimates.

Step-by-step explanation:

Both Gary and Mary will only earn their bonus if the plant's productivity increases, and that is achieved by producing more finished units in the same amount of time. That is why Gary wants to increase the number of finished units so that they can both cash their bonuses.