CASIO is a fully automated electronics manufacturing company. Company is incurring a
lot of overheads in its manufacturing department. Cost accountant of the company wants
to use machine hour rate method for the absorption of manufacturing overheads and seeks
your help. You are required to prepare a report detailing the method, its suitability, steps
in its computation and the advantages and disadvantages of using it.
Answers
Answer:
Advantages and disadvantages of automation
Advantages commonly attributed to automation include higher production rates and increased productivity, more efficient use of materials, better product quality, improved safety, shorter workweeks for labour, and reduced factory lead times. Higher output and increased productivity have been two of the biggest reasons in justifying the use of automation. Despite the claims of high quality from good workmanship by humans, automated systems typically perform the manufacturing process with less variability than human workers, resulting in greater control and consistency of product quality. Also, increased process control makes more efficient use of materials, resulting in less scrap.
A main disadvantage often associated with automation, worker displacement, has been discussed above. Despite the social benefits that might result from retraining displaced workers for other jobs, in almost all cases the worker whose job has been taken over by a machine undergoes a period of emotional stress. In addition to displacement from work, the worker may be displaced geographically. In order to find other work, an individual may have to relocate, which is another source of stress.