Miller Manufacturing makes several different products for the mountain biking
enthusiast. In an extremely competitive market, Miller has assumed a strong
position by stressing cost control. Several years ago, the company implemented a
standard cost system based on practical standards that were considered fair and
reasonable by both managers and line workers.
Last month, Miller hired Kate Daniel as its new controller. After a brief review of
operations, Kate has decided to make some changes. She reviewed materials and
labor standards, and believes they need to be revised. She has indicated to other
managers that workers need to be better motivated and that tighter labor
standards will provide that motivation.