Explanation:
Penetration Pricing:
It is the marketing approach that consists of a strategy to insert a new product in the market offering lower prices.
This strategy would help a new company, for example, to enter the market and already achieve good demand for its products and services, in addition to this strategy being a barrier of entry for new competitors.
Penetration pricing is the most appropriate marketing strategy for companies that need to reach a market place and reach a large number of people, which is achieved when offering a product with quality and benefits that can create consumer needs for customers, which makes it possible for the company to fulfill its objective and then be able to establish itself in the market and then increase prices so that the demand for the products is maintained.
This strategy is generally used by retailers and organizations that offer products offered in bulk, such as food, cosmetics, automobiles, etc.
Other than culture, what other organizational factors should be used to determine which project structure should be used?
Answer:
The two major considerations are the percentage of core work that involves projects and resource availability.
Sheffield Company has $145,000 of inventory at the beginning of the year and $131,000 at the end of the year. Sales revenue is $1,972,800, cost of goods sold is $1,145,400, and net income is $248,400 for the year. The inventory turnover ratio is:
Answer:
Sheffield Company
Inventory Turnover Ratio = Cost of goods sold/Average Inventory
= $1,145,400/$138,000
= 8.3 times
Explanation:
a) Data and Calculations:
Beginning inventory = $145,000
Ending inventory = $131,000
Average inventory = (Beginning inventory + Ending inventory)/2
= ($145,000 + 131,000)/2
= $138,000
Sales revenue = $1,972,800
Cost of goods sold = $1,145,400
Net income = $248,400
b) The inventory turnover ratio for Sheffield Company is an efficiency ratio that shows how inventory is managed and the number of times Sheffield sells or consumes the inventory during an accounting period. This is why Sheffield Company takes the average of the inventories in order to smoothen seasonal fluctuations in the inventory level during the year. When this ratio divides the number of days in the accounting period, Sheffield will get the days it takes for inventory to be purchased or produced, and then sold or consumed.
Metlock Mining Company purchased land on February 1, 2020, at a cost of $1,101,100. It estimated that a total of 58,200 tons of mineral was available for mining. After it has removed all the natural resources, the company will be required to restore the property to its previous state because of strict environmental protection laws. It estimates the fair value of this restoration obligation at $112,500. It believes it will be able to sell the property afterwards for $125,000. It incurred developmental costs of $250,000 before it was able to do any mining. In 2020, resources removed totaled 29,100 tons. The company sold 21,340 tons.
Compute the following information for 2020.
(a) Per unit mineral cost: _______
(b) Total material cost of December 31, 2020, inventory:_______
(c) Total material cost in cost of goods sold at December 31, 2020:_______
Answer and Explanation:
The computation is shown below;
(a)
Purchase price of Land $1,101,100
Add: Fair value of restoration $112,500
Less: residual value -$125,000
Developmental costs $250,000
Total $1,388,600
Divided by Tons available for mining 58,200
Per unit Material cost $23.00
(b) Inventory $178,480 (29100 - 21340) × $23
(c ) Cost of goods sold $490,820 (21340 × $23)
What are 3 benefits of the Pay down credit card feature in Quickbooks Online?
A. It allows users to electronically pay their credit card balances from within QuickBooks Online
B. It prevents miscategorization of credit card payment transactions
C. It helps users identify which credit cards have interest rates that are too high
D. It provides easy-to-understand language for non-accountant users
E. It prevents common errors that affect the company's financial statements
F. It compares your client's credit card balances side by side
Answer:
b or e
Explanation:
The 3 benefits of the Pay down credit card feature in Quickbooks Online are: Option B,E and F
B. It prevents miscategorization of credit card payment transactions
E. It prevents common errors that affect the company's financial statements
F. It compares your client's credit card balances side by side
•It help to prevents miscategorization of credit card payment transactions as it enables all the credit card payment transaction to designated or allocated to the right person who made the transaction.
• It help to prevents common errors that affect the company's financial statements such as error of reversal example is recording a transaction amount as $25 instead of $52.
• It help to compares your client's credit card balances side by side which help to prevent error as the credit card are easily evaluated.
Inconclusion The 3 benefits of the Pay down credit card feature in Quickbooks Online are: Option B,E and F
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C. Imagine you Deposit K10, 000 every six months for the next five years at an interest rate of 10% per annum. You would want to know what this value will be at the end of the period.
Required:
i. Using simple interest (5 Marks)
ii. Using compounded interest (5 Marks)
iii. If the deposits were made at the beginning of every six months (5 Marks)
iv. If the deposits were made at the end of every six months (5 Marks
i) Using simple interest, if the deposits were made at the beginning of every six months, the ending (future value) would be K127,500.
ii) Using simple interest, if the deposits were made at the end of every six months, the ending (future value) would be K122,500.
iii) Using compounded interest, if the deposits were made at the beginning of every six months, the ending (future value) would be K132,067.87.
iv) Using compounded interest, if the deposits were made at the end of every six months, the ending (future value) would be K125,778.93.
What differentiates simple interest from compound interest?The difference between simple interest and compound interest is that simple interest is only based on the principal.
On the other hand, compound interest computes interest on both the principal and accumulated interest.
Simple Interest (Deposits at Beginning):Period Principal Interest Balance
1 K10,000 K500 K10,500 (K10,000 + K500)
2 20,000 1,000 21,500 (K10,500 + K10,000 + K1,000)
3 30,000 1,500 33,000
4 40,000 2,000 45,000
5 50,000 2,500 57,500
6 60,000 3,000 70,500
7 70,000 3,500 84,000
8 80,000 4,000 98,000
9 90,000 4,500 112,500
10 100,000 5,000 127,500
Simple Interest (Deposits at Ending):Period Principal Interest Balance
1 K10,000 K0 K10,000
2 20,000 500 20,500 (K10,000 + K10,000 + K500)
3 30,000 1,000 31,500
4 40,000 1,500 43,000
5 50,000 2,000 55,000
6 60,000 2,500 67,500
7 70,000 3,000 80,500
8 80,000 3,500 94,000
9 90,000 4,000 108,000
10 100,000 4,500 122,500
Compound Interest at Ending:N (# of periods) = 10 (5 x 2)
I/Y (Interest per year) = 10%
PV (Present Value) = K0
PMT (Periodic Payment) = K10,000
Results:
FV = K125,778.93
Sum of all periodic deposits = K100,000 (K10,000 x 2 x 5)
Total Interest = K25,778.93
Compound Interest at Beginning:N (# of periods) = 10 (5 x 2)
I/Y (Interest per year) = 10%
PV (Present Value) = K0
PMT (Periodic Payment) = K10,000
Results:
FV = $132,067.87
Sum of all periodic deposits = K100,000 (K10,000 x 2 x 5)
Total Interest = K32,067.87
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One instance of a political or legal trend is the maturing of the "Millennials" cohort in
the United States.
True
False
True. The maturing of the "Millennials" cohort in the United States is an instance of a demographic trend, which can have political and legal implications as this generation becomes a larger portion of the population and gains more influence in society.
What are MillennialsMillennials are a generation of people born between the early 1980s and the mid-1990s or early 2000s, depending on the source. They are also sometimes referred to as Generation Y. Millennials are known for growing up during a time of rapid technological advancement, globalization, and social change.
They are the first generation to have grown up with easy access to the internet, social media, and smartphones, which has shaped their attitudes, behaviors, and worldview.
The values, beliefs, and priorities of the Millennial generation are likely to shape the political and legal landscape in the years to come.
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Mary, Ellen, and Doug are co-workers. Mary frequently makes sexual comments to
Doug and comments on his physique. Doug seems to find this amusing, but Ellen
finds it offensive.
True or False: Ellen is not a victim of harassment because none of Mary's comments
are directed at her.
True "Ellen is not a victim of harassment because none of Mary's comments are directed at her." Option A
Who is a victim of harassment?
Generally, It is possible for anybody, regardless of factors such as race, color, age, religion, ancestry, or se/xual orientation, to be the target of harassment or discrimination.
People who are impacted by the harassment might be victims, bystanders, or even witnesses in certain instances.
All of these people are considered to be engaged. There are instances of discrimination and harassment that were not done intentionally.
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Read Zoom Video Communications and discuss how Zoom Video Communications illustrate the sources of service sector growth by commenting on information technologi
7. Internet as an enabler, Innovation, and changing demographics
Zoom Video Communications is a platform that allows communication via the internet in real time, being a facilitating tool for business.
How does innovation impact business?It allows internal and external improvements to be incorporated, such as the digital age for example, which through the internet has revolutionized the way business can be carried out, with real-time communication regardless of geographic location.
Demographic changes are also a process resulting from the innovations that made globalization possible, making multicultural environments and businesses more focused on diversity.
Therefore, information technology was the factor that simplified the business sector by enabling greater reliability and speed in processes, generating more competitiveness for industries.
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A blank a relationship would include your coworker and friends
A colleague relationship would include your co-workers and friends.
This can also apply to your supervisor and colleagues, who make up the entirety of the individuals you engage with at work. Relationships between coworkers are frequently cordial, competent, and oriented towards a same objective.
Any interaction or relationship between two or more people is considered a colleague relationship in the broadest sense. They are the associations that people who frequently engage with one another perceive to exist.
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Question 12
In the context of international trade restrictions, governments tend to use protective
are crucial to the domestic economy.
export duties
quorums
tariffs
voluntary export restraints
In the context of international trade restrictions, governments tend to use protective are crucial to the domestic economy: tariffs
A government is the device or institution of people governing a prepared community, normally a state A gadget of government distributes strength amongst exclusive parts and stages of the state. Political scientists examine the makes use of energy, inclusive of how energy is shipped inside a kingdom. the quantity of power held with the aid of the vital authorities determines the system of the presidency a nation has.
Government is the gadget or institution of human beings governing an organized community, commonly a kingdom. in the case of its wide associative definition, authorities usually consist of legislature, govt, and judiciary. a government is an institution or a device made of a set of human beings that takes care of or manages a country or a country. every government has its own charter or a hard and fast of fundamental standards that it follows to make sure effective governance.
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the impact of inflation in businesses
Answer:
Rapidly rising prices not only affect the price consumers pay, they also affect the cost businesses have to pay for materials and inventory. When replacement inventory costs more than the inventory you just sold, it can lead to inventory shortages.
Explanation:
I hope it helped
Dividends Per Share
Sandpiper Company has 30,000 shares of cumulative preferred 1% stock, $100 par and 50,000 shares of $25 par common stock. The following amounts were distributed as dividends:
20Y1 $75,000
20Y2 24,000
20Y3 90,000
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
The dividends per share for preferred stock for years 20Y1, 20Y2, and 20Y3 are $2.50, $0.80, and $3.00, respectively. The dividends per share for common stock for the same years are $1.50, $0.48, and $1.80, respectively.
To determine the dividends per share for preferred and common stock for each year, we need to divide the total dividend amount by the number of shares for each type of stock.
Preferred Stock:
The preferred stock has a 1% dividend rate and a par value of $100 per share. There are 30,000 shares of cumulative preferred stock.
Year 20Y1:
Dividend per share for preferred stock = Dividend amount / Number of preferred shares
Dividend per share for preferred stock = $75,000 / 30,000
Dividend per share for preferred stock = $2.50
Year 20Y2:
Dividend per share for preferred stock = $24,000 / 30,000
Dividend per share for preferred stock = $0.80
Year 20Y3:
Dividend per share for preferred stock = $90,000 / 30,000
Dividend per share for preferred stock = $3.00
Common Stock:
The common stock has a par value of $25 per share. There are 50,000 shares of common stock.
Year 20Y1:
Dividend per share for common stock = Dividend amount / Number of common shares
Dividend per share for common stock = $75,000 / 50,000
Dividend per share for common stock = $1.50
Year 20Y2:
Dividend per share for common stock = $24,000 / 50,000
Dividend per share for common stock = $0.48
Year 20Y3:
Dividend per share for common stock = $90,000 / 50,000
Dividend per share for common stock = $1.80
In summary, the dividends per share for preferred stock for years 20Y1, 20Y2, and 20Y3 are $2.50, $0.80, and $3.00, respectively. The dividends per share for common stock for the same years are $1.50, $0.48, and $1.80, respectively.
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g The Nite Lite Factory produces two products - small lamps and desk lamps. It has two separate departments - finishing and production. The overhead budget for the finishing department is $550,000, using 500,000 direct labor hours. The overhead budget for the production department is $400,000 using 80,000 direct labor hours. If the budget estimates that a desk lamp will require 2 hours of finishing and 1 hour of production, how much factory overhead will be allocated to each unit of desk lamps using the multiple production department factory overhead rate method with an allocation base of direct labor hours
Answer:
$7.20
Explanation:
Given the following :
FINISHING department :
overhead budget = $550,000
direct labor HOURS = 500,000
PRODUCTION department :
overhead budget = $400,000
direct labor hours = 80,000
Predetermined allocation rate for finishing department :
Overhead / allocation base = ($550,000 / 500,000) = $1.10 per direct labor hour
Predetermined allocation rate for production department :
Overhead / allocation base = ($400,000 / 80,000) = $5 per direct labor hour
If the budget estimates that a desk lamp will require 2 hours of finishing and 1 hour of production:
Finishing department :
(2 × Predetermined allocation rate for finishing department)
= (2 × $1.10) = $2.20
Production :
(1 × Predetermined allocation rate for production department)
= (1 × $5). = $5
Total = ($2.20 + $5) = $7.20
Consider a firm redesigning its logistics network. What are the advantages of having a small number of centrally located warehouses? What are the advantages of having a larger number of warehouses closer to the end customers?
Small centrally located warehouses offer cost efficiency and simplified inventory management, while larger warehouses closer to customers provide faster delivery, better customer service, and cost savings in shipping.
Having a small number of centrally located warehouses offers several advantages in a firm's logistics network:
Cost Efficiency: Centralized warehouses can lead to cost savings in terms of inventory management, transportation, and operational overheads. With fewer warehouses, the firm can benefit from economies of scale in procurement, storage, and distribution.
Simplified Inventory Management: Managing inventory becomes more streamlined when there are fewer warehouses. It allows for better control and visibility over stock levels, reducing the risk of stockouts or overstocking.
Faster Transit Times: With centrally located warehouses, products can be shipped more quickly to various regions since they are closer to major transportation hubs. This reduces lead times and improves overall customer satisfaction.
Improved Coordination: Centralized warehouses facilitate better coordination and synchronization of supply chain activities. It becomes easier to manage inbound and outbound logistics, optimize transportation routes, and consolidate shipments.
On the other hand, having a larger number of warehouses closer to end customers provides the following advantages:
Faster Delivery: Proximity to end customers enables faster order fulfillment and delivery. Products can reach customers more quickly, reducing transit times and improving responsiveness.
Enhanced Customer Service: Local warehouses allow for better customization and personalization of service. They can cater to specific regional preferences, offer faster response times to customer queries, and handle returns or exchanges more efficiently.
Lower Shipping Costs: By locating warehouses closer to customers, transportation costs can be reduced as products travel shorter distances. This can lead to cost savings in shipping expenses.
Flexibility and Redundancy: Having multiple warehouses distributed geographically provides redundancy and flexibility in the supply chain. It mitigates the risk of disruptions, such as natural disasters or transportation issues, as the firm can rely on alternative warehouse locations.
In summary, a small number of centrally located warehouses offer cost efficiency and streamlined inventory management, while a larger number of warehouses closer to end customers provide faster delivery, improved customer service, lower shipping costs, and increased flexibility.
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April's credit card has a balance of $483.42, but the amount that she needs to pay to bring the
card to a $0 balance is $726.18 because she missed a payment. What is April's interest rate?
The interest rate for April is 50.29%.
What is Interest ?In the fields of finance and economics, interest is the payment of a sum over and above the principal amount to a lender or depositor by a borrower or deposit-taking financial institution at a set rate.
It is not the same as a fee that the borrower might pay to the lender or another entity.
Given that April's credit card debt is $483.42 but that he needs to make a payment of $726.18, the interest rate for non-payment that he is subject to is as follows:
483.42 = 100
726.18 = X
((726.18 x 100) / 483.42) = X
= X
Consequently,
since 150.29 = 150.29 - 100 = 50.29 %
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The City of Houghton enacted an ordinance that forbids religious groups from distributing religious materials within the city limits of Houghton unless the distributor is granted a permit. Other types of materials can be distributed without a permit. What concerns do you have about the constitutionality of this ordinance?
The concerns that have about the constitutionality of this ordinance are Freedom of Religion, Content-Based Restrictions, Prior Restraint, Equal Protection and Unfettered Discretion.
Here are a few major concerns:
Religious Freedom: The First Amendment to the United States Constitution provides religious freedom, which includes the right to practise and express one's religious views. Content-Based limitation: By treating religious materials differently from other types of materials, the ordinance appears to impose a content-based limitation on communication. Prior constraint: Requiring religious organisations to seek a licence before disseminating religious materials is a type of prior constraint on speech. Equal Protection: If the ordinance treats religious groups differently than other groups or items, it may raise questions regarding legal equality. Unrestricted Discretion: If local officials have unrestricted discretion in choosing who gets a permit, there is a possibility of viewpoint discrimination or bias.For such more question on Restrictions:
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What expectation for ethical behavior and procedures that should be followed?
Ethical behavior and procedures are essential in maintaining integrity and trust in any organization. The expectations for ethical behavior and procedures may vary depending on the specific industry, organization, and jurisdiction.
However, there are some common principles and guidelines that can be followed. Here are a few key expectations:
Compliance with Laws and Regulations: Employees and stakeholders should comply with all applicable laws, regulations, and industry standards. This includes legal and regulatory requirements related to financial reporting, taxation, data protection, workplace safety, and environmental protection.
Honesty and Integrity: Individuals should act with honesty, integrity, and transparency in all their professional interactions. This involves avoiding conflicts of interest, providing accurate and truthful information, and not engaging in fraudulent or deceptive practices.
Confidentiality and Data Protection: Employees should respect the confidentiality of sensitive information, including customer data, trade secrets, and proprietary information. They should follow appropriate procedures to protect data privacy and ensure compliance with data protection laws.
Fair Treatment and Respect: All individuals should be treated fairly and with respect, regardless of their background, race, gender, religion, or other characteristics. Discrimination, harassment, or any form of unfair treatment should not be tolerated.
Ethical Decision-Making: Individuals should make decisions based on ethical considerations, considering the impact on stakeholders and society as a whole. This involves avoiding conflicts of interest, exercising professional judgment, and seeking guidance when faced with ethical dilemmas.
Accountability and Responsibility: Employees should take responsibility for their actions, acknowledge mistakes, and be accountable for the consequences of their decisions. This includes reporting unethical behavior, complying with internal control procedures, and cooperating with internal and external audits.
Social and Environmental Responsibility: Organizations and individuals should consider the broader impact of their actions on society and the environment. This may involve promoting sustainability, minimizing waste and pollution, and supporting social initiatives.
These expectations for ethical behavior and procedures should be communicated clearly to all employees through codes of conduct, ethics training programs, and regular communication from management. It is important to foster a culture of ethics and integrity, where individuals are empowered to raise concerns, report violations, and seek guidance without fear of retaliation.
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The following information was available for Pina Colada Corp. at December 31, 2022:
Beginning inventory $93000
Ending inventory $64000
Cost of goods sold $763805
Sales $1040000.
Pina days inventory turnover ratio in 2022 was: ___________
Answer:
37.51 days
Explanation:
Use the following formula to calculate the Inventory Turnover ratio
Inventory Turnover ratio = Cost of goods sold / Average Inventory
Where
Cost of goods sold = $763,805
Average Inventory = ( Beginning Inventory + Ending Inventory ) / 2 = ( $93,000 + $64,000 ) / 2 = $78,500
Placing values in the formula
Inventory Turnover ratio = $763,805 / $78,500
Inventory Turnover ratio = 9.73
Inventory Days = Numbers of days in a year / Inventory Turnover ratio = 365 / 9.73 = 37.51 days
True or False: The term “academic training” refers primarily to formal classes taken in school.
Answer:
False
Explanation:
A person should AVOID taking a great deal of risk if he has
2
sufficient retirement funds.
discretionary funds.
limited financial resources.
O no dependents.
Answer:
Limited financial resources.
A person should avoid taking a great deal of risk if he has limited financial resources. Hence, the correct answer is option C.
What are financial resources?Financial resources refer to the assets and funds available to an individual or organization to meet their financial obligations and achieve their financial goals. It can include income, savings, investments, and other assets that can be converted into cash.
A person with limited financial resources should avoid taking a great deal of risk because they may not have the financial cushion to absorb potential losses. Furthermore, people with limited financial resources may have a lower risk tolerance.
Therefore, a person should avoid taking a great deal of risk if he has limited financial resources. Hence, the correct answer is option C.
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___________ is a way of saving a file so it can be used by a different program. A. Selecting B. Exporting C. Citing D. Formatting Please select the best answer from the choices provided A B C D Mark this and return
Answer:
B. Exporting
Explanation:
What is the whiplash effect?
Answer:
A neck injury due to forceful, rapid back-and-forth movement of the neck, like the cracking of a whip.
Explanation:
A person who has downloaded the Flipboard app on his or her smartphone to get full-screen magazines, multiple news and entertainment sources, entertainment, local news, and business news is attempting to fulfill which motivation for using a mobile application?
a. socializing
b. preparation
c. self-expression
d. accomplishing
e. discovery
Based on the provided information, the motivation for using a mobile application is socializing.
What is a Mobile app?Mobile app can be regarded as computer program that is been run on mobile tablet for various purposes.
Therefore, Flipboard app on his or her smartphone to get full-screen magazines, multiple news serves a social propose.
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Initiative means letting your boss define your tasks.
Answer:
False
Explanation:
1. the ability to assess and initiate things independently.
2. the power or opportunity to act or take charge before others do
Answer:
F
Explanation:
"Easton Company uses 2019: Date Activity Quantity Unit Price 5/1 Beginning Inventory 130 $11 5/5 Purchase 280 $13 5/15 Purchase 140 $15 5/25 Purchase 160 $17 Sales were 430 units at $25. Using the FIFO method, determine the dollar value of Ending Inventory for the month of May.”
Answer:
$4,520
Explanation:
The computation of the dollar value of the ending inventory using the FIFO method is as follows:
But before that the ending inventory is
= Beginning inventory + purchased units + purchased units + purchased units - sales units
= 130 units + 280 units + 140 units + 160 units - 430 units
= 280 units
Now the ending inventory is
= 160 units × $17 + (280 units - 160 units) × $15
= $2,720 + $1,800
= $4,520
Ventura uses a just-in-time (JIT) manufacturing system for all its materials, components, and products. The master budget of the company for June called for use of 11,300 square feet of materials, while the flexible budget for the actual output of the month had 10,300 square feet of materials at a standard cost (SP) of $10.20 per square foot. Company records show that the actual price paid (AP) for the materials used in June was $10.10 per square foot, and that the direct materials purchase-price variance for the month was $1,050. The materials usage (quantity) variance for June, to the nearest dollar, was:
Juniper Design Limited of Manchester, England, is a company specializing in providing design services to residential developers. Last year the company had net operating income of $420,000 on sales of $1,500,000. The company’s average operating assets for the year were $1,700,000 and its minimum required rate of return was 15%.
Required:
Compute the company’s residual income for the year.
Answer: 165,000
Explanation:
To compute the company’s residual income for the year, we can use the formula:
Residual Income = Net Operating Income – (Minimum Required Rate of Return x Average Operating Assets)
Given: Net Operating Income = $420,000 sales = $1,500,000
Average Operating Assets = $1,700,000
Minimum Required Rate of Return = 15% = 0.15
Residual Income = Net Operating Income – (Minimum Required Rate of Return x Average Operating Assets)
Residual Income = $420,000 – (0.15 x $1,700,000)
Residual Income = $420,000 – $255,000
Residual Income = $165,000
Therefore, the company’s residual income for the year was $165,000.
f the inflation rate was 2.60% and the nominal interest rate was 8.00% over the last year, what was the real rate of interest over the last year? Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. Round intermediate calculations to four decimal places.
If the inflation rate was 2.60% and the nominal interest rate was 8.00% over the last year, the real rate of interest over the last year was 5.40%.
How to solve for the real rate of interestTo calculate the real rate of interest, we need to subtract the inflation rate from the nominal interest rate.
Real interest rate = Nominal interest rate - Inflation rate
Real interest rate = 8.00% - 2.60%
Real interest rate = 5.40%
Therefore, the real rate of interest over the last year was 5.40%.
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You are the senior auditor in charge of the audit of Potholders Ltd, a retailer of garden pots and gnomes. Your audit firm has been auditor for the last four years. Historically, the firm has had a competent and qualified internal audit team upon whose work you have placed significant reliance. Management is well respected and is viewed to have high integrity, although there was some friction last year when the auditor discovered sales cut-off errors, which reduced profit and had an adverse impact on management bonuses under the new bonus scheme. While the company has been very profitable, drought and water restrictions have placed pressure on management to maintain profitability. In planning the audit you become aware of the following facts:
1. There is a cash shortage caused by recent business expansions and falls in cash inflow.
2. The accounts payable balance has increased by 30 per cent on last year.
3. Days in debtors has increased from 45 days to 63 days.
4. Due to the difficulty of maintaining sales levels, credit checks are not always carried out.
5. Internal audit department staff levels have been halved.
6. After a recent series of thefts, control over inventory has been tightened. When goods are received they are counted and inspected and, after a pre-numbered goods received advice is prepared, the goods are moved to an enclosed storage area with adequate security, including closed-circuit TV. Goods are released from the store only upon receipt of a properly authorised requisition form.
7. In the past, all purchases were made centrally at head office. However, store managers are now asked/allowed to purchase direct from local suppliers in order to obtain inventory at lower prices and avoid transport costs. Some store managers in North Queensland are importing from Indonesia.
Required:
1. Identify each component of audit engagement.
2. Outline the facts that increase inherent risks and the facts that increase or decrease control risk
The components of audit engagement from the question are:
Cost-benefitCircumvention designsapplication of controlscontrol environment The factors that increase inherent risksThe integrity of the people that are in managerial positions. The experience and the effectiveness of managers.Pressures faced by management.The type of business.Factors that affect control risks:Presence of Novel situationsThe use of Outdated controlsImproper separation of dutiesRead more on inherent risks here: https://brainly.com/question/14538724
The expected average rate of return for a proposed investment of $4,250,000 in a fixed asset, using straight-line depreciation, with a useful life of 20 years, no residual value, and an expected total net income of $8,500,000 over the 20 years is:_________ (round to two decimal points).
a. 10.00%
b. 20.00%
c. 40.00%
d. 1.00%
Answer:
A
Explanation:
Average rate of return is a capital budgeting method. It is used to determine if a firm should invest in a project or should not invest in a project
average rate of return = average net income / average cost of investment
average net income = (total net income - depreciation) / useful life
(8,500,000 - $4,250,000) / 20 = 212,500
Average cost of investment =( beginning book value of the investment - ending book value of the investment) / 2
($4,250,000 - 0) / 2 = 2,125,000
ARR = 212,500 / 2125,000 = 0.1 = 10%