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bearhunter [10]
4 years ago
8

List two major characteristics that are useful in predicting the likelihood of fraudulent financial reporting in an audit for ea

ch of the characteristics state two things that the auditor can do to evaluate its significance in the engagement
Business
1 answer:
Anna35 [415]4 years ago
5 0

The two major characteristics that are useful in predicting the likelihood of fraudulent financial reporting in an audit are weak internal controls and industry conditions.

For both of these, more audit work and larger samples are ways to mitigate this risk.

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Road Gripper Tire Co. manufactures automobile tires. Standard costs and actual costs for direct materials, direct labor, and fac
Nezavi [6.7K]

Answer:

Answer is explained in the explanation section below.

Explanation:

Solution:

a.

In part a, we need to find the following 3 requirements:

1. Direct Materials Price Variance

2. Direct Materials Quantity Variance

3. Total Direct Materials Cost Variance

Direct Materials Price Variance:

It can be calculated by using the following formula:

DMPV = AQ multiplied by (AP minus the SP)

Where,  

DMPV = Direct Materials Price Variance

AQ = Actual Quantity

AP = Actual Price

SP = Standard Price

We do have all the data, so just plug in the values into the above equation to get the DMPV.

AQ = 101,000

AP  = 6.50 USD

SP = 6.40 USD

So,

DMPV = 101,000 ( 6.50 - 6.40)

DMPV = 10,100 USD

Direct Materials Quantity Variance:

DMQV = SP ( AQ - SQ )

Where,

DMQV = Direct Materials Quantity Variance = ?

SP  = Standard Price  = 6.40 USD

AQ = Actual Quantity  = 101,000

SQ = Standard Quantity  = 100,000

Plugging in the values:

DMQV  = 6.40  ( 101,000 - 100,000)

DMQV = 6400 USD

Total Direct Materials Cost Variance:

DMCV = SMC - AMC

Where,

DMCV =  Direct Materials Cost Variance = ?

SMC = Standard Market Cost = 6.40 USD x 100,000

AMC = Actual market Cost = 6.50 USD x 101,000

DMCV = (6.40 USD x 100,000) - (6.50 USD x 101,000)

DMCV = 640,000 - 656,500

DMCV =  16,500 USD

b.

For part b, we need following particulars:

1. Direct Labor Rate Variance (DLRV)

2. Direct Labor Time Variance (DLTV)

3. Direct Labor Cost Variance  (DLCV)

Direct Labor Rate Variance (DLRV) :

DLRV = (ADLR - SDLR) x ADLH

Where,

ADLR  = Actual Direct Labor Rate = 15.40 USD

SDLR = Standard Direct Labor Rate = 15.75 USD

ADLH = Actual Direct Labor Hour = 2000

So,

DLRV = (ADLR - SDLR) x ADLH

DLRV =  (15.40 USD  - 15.75 USD  ) x 2000

DLRV = 700 USD

Direct Labor Time Variance (DLTV):

DLTV = ( ADLH - SDLH ) x SDLR

SDLH = Standard Direct Labor Hour = 2080

DLTV = ( 2000  - 2080 ) x 15.75 USD  

DLTV = 1260 USD

Direct Labor Cost Variance  (DLCV)

DLCV = SDLC - ADLC

SDLC = Standard Direct Labor Cost  

ADLC = Actual Direct Labor Cost

DLCV =  (1540 x 2000) - (15.75 x 2080)

DLCV = 1960 USD

c.

For Part c, we need following:

1. variable factory overhead controllable variance (VFOCV)

2. fixed factory overhead volume variance (FFOVV)

3. Total factory overhead cost variance (TFOCV)

variable factory overhead controllable variance (VFOCV):

VFOCV =  AFO - B

Where,

AFO = Actual Factory Overhead  = 8200

B = Budgeted Allowance Based on Standard Hours Allowed = 4160x0.5x4

B = 8320 USD

VFOCV =  8200 - 8320  

VFOCV =   120 USD

fixed factory overhead volume variance (FFOVV) :

FFOVV = (S - BH ) x SOR

Where,

S = Standard Hours for actual output = 4160 x 0.5

BH = Budgeted Hours = 2080

SOR = Standard Overhead Rate = 6 USD

FFOVV = (4160 x 0.5  - 2080) x 6

FFOVV =  0 USD

Total factory overhead cost variance (TFOCV):

TFOCV = AFO - SO

Where,

AFO = Actual Factory Overhead = 20,200

SO = Standard Overhead = 2080 x 10

TFOCV =  20,200 - ( 2080 x 10  )

TFOCV =  600 USD

7 0
3 years ago
What does woolworths do to help the people​
Margaret [11]
Donate surplus food from food stores to communities who need the support.
3 0
2 years ago
If the market price is above or equal to the average cost, but below the average cost the firm should keep producing in the run
tangare [24]

If the market price is above or equal to the average variable cost, but below the average total cost the firm should keep producing in the run even though it does so at a loss.

<h3>When should a firm shut down production?</h3>

A firm should continue production in the short run if the price is above the average variable cost even if price is below the average total cost. The short run is a period when at least one or more factors of production are fixed.

To learn more about when a firm should shut down, please check: brainly.com/question/13034691

6 0
2 years ago
(Scenario 8-4) Within various sections of the ____ portion of its advertising plan, American Express explains how and why Visa h
KatRina [158]

Answer: situation analysis

Explanation:

6 0
3 years ago
Read 2 more answers
Seller Martin is looking at his Closing Disclosure. Which one of the following items is he likely to see
Tcecarenko [31]

Martin is likely to see credits and debits appear on the closing statement. since he is looking at his Closing Disclosure.

<h3>What is closing disclosure?</h3>

Closing disclosure is a document which gives full information about loan taken by an individual or institution.

In other words, closing disclosure provides final details about the mortgage loan you have selected.

Contents of closing disclosure are:

  • Loan fees
  • Interest rate
  • Purchase price
  • Projected payment

Learn more about closing disclosures here: brainly.com/question/4375643

#SPJ1

3 0
2 years ago
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