Question One (word limit: 800 words) Willy Auto Part (WAP) manufactures replacement parts for car repairs. The followingsituation concerns two WAP employees: Sandra Smith, head of the company’s Billing andInvoicing (38d) Department, and Jack Davis, the firm’s general manager. Smith’s Billing Department makes heavy use of hourly employees and is evaluated as a costcenter. Understanding the need for prompt collection of receivables, Smith strives to run afirst-class operation. Smith also understands the need to contribute in a big way to WAP’sfinancial performance so she continually strives to minimize 38d expenses. Unfortunately, Smith experienced a heated discussion with Davis several weeks ago, thesubject being the shoddy operation that she is running. Davis complained loudly about thelack of timely billings to customers and the general lack of attention to detail, as manycomplaints have surfaced about erroneous invoices and customer statements. REQUIRED: A. What measure(s) of performance should the company use to evaluate 38d manager? Should the company consider controllability when measuring the performance of themanager? Why? (2 marks) 3. Does Davis have a valid reason to be upset with Smith? Given the nature of the 38dDepartment, did Smith make a mistake in her quest to minimize expenses? Explain. (5 marks) C. Is it likely that the 38d Department could be evaluated as a profit center? Why? (3 marks)
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