FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Dash Riprock is a cost analyst with Sade Insurance Company, Safe is applying standards to tis claims payment operations. Claims payment is a repetitive operation that could be evaluated with standards. Dash used time and motion studies to identify an ideal standard of 36 claims processed per hour. The Claims Processing Department manager. Henry Tudor, has rejected this standard and has argued that the standard should be 30 claims processed per hour. Henry and Dash were unable to agree, so they decided to discuss this matter openly at a joint meeting with the Vice President of Operations, who would arbitrate a final decision. Prior to the meeting, Dash wrote the following memo to the Vice President:
To: Anne Boeyn, Vice President of Operations
From: Dash Riprock
Re: Standard in the Claims Processing Department
As you know, Henry and I are scheduled to meet ith you to discuss our disagreement about the appropriate standards for the Claims Processing Department. I have conducted time and motion studies and have determined that the ideal standard is 36 claims processed per hour. Henry argues that 30 claims processed per hour would be more appropriate. I believe he is trying to “pad” the budget with some slack. I’m not sure what he is trying to get away with, but I believe a tight standard will drive efficiency up in his area. I hope you will agree when we meet with you next week.
Discuss the ethical and professional issues in this situation.
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