Hair Co manufactures three types of electrical goods for hair: curlers （C), straightening

第1题

Cardio Co manufactures three types of fitness equipment: treadmills （T), cross trainers （C

Cardio Co manufactures three types of fitness equipment: treadmills (T), cross trainers (C) and rowing machines (R). The budgeted sales prices and volumes for the next year are as follows:

Labour costs are 60% fixed and 40% variable. General fixed overheads excluding any fixed labour costs are expected to be $55,000 for the next year.

Required:

(a) Calculate the weighted average contribution to sales ratio for Cardio Co. (4 marks)

(b) Calculate the margin of safety in $ revenue for Cardio Co. (3 marks)

(c) Using the graph paper provided and assuming that the products are sold in a CONSTANT MIX, draw a multi-product breakeven chart for Cardio Co. Label fully both axes, any lines drawn on the graph and the breakeven point. (6 marks)

(d) Explain what would happen to the breakeven point if the products were sold in order of the most profitable products first.

Note: You are NOT required to demonstrate this on the graph drawn in part (c). (2 marks)

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第2题

Hawthorn Enterprises CoHawthorn Enterprises Co (Hawthorn) manufactures and distributes f

Hawthorn Enterprises CoHawthorn Enterprises Co （Hawthorn) manufactures and distributes f

Hawthorn Enterprises Co

Hawthorn Enterprises Co (Hawthorn) manufactures and distributes fashion clothing to retail stores. Its year end was 31 March 2015. You are the audit manager and the year-end audit is due to commence shortly. The following three matters have been brought to your attention.

Hawthorn receives monthly statements from its main suppliers and although these have been retained, none have been reconciled to the payables ledger as at 31 March 2015. The engagement partner has asked the audit senior to recommend the procedures to be performed on supplier statements.(3 marks)

(ii) Bank reconciliation

During last year’s audit of Hawthorn’s bank and cash, significant cut off errors were discovered with a number of post year-end cheques being processed prior to the year end to reduce payables. The finance director has assured the audit engagement partner that this error has not occurred again this year and that the bank reconciliation has been carefully prepared. The audit engagement partner has asked that the bank reconciliation is comprehensively audited. (4 marks)

(iii) Receivables

Hawthorn’s receivables ledger has increased considerably during the year, and the year-end balance is $2·3 million compared to $1·4 million last year. The finance director of Hawthorn has requested that a receivables circularisation is not carried out as a number of their customers complained last year about the inconvenience involved in responding. The engagement partner has agreed to this request, and tasked you with identifying alternative procedures to confirm the existence and valuation of receivables. (5 marks)

Required:

Describe substantive procedures you would perform. to obtain sufficient and appropriate audit evidence in relation to the above three matters.

Note: The mark allocation is shown against each of the three matters above.

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第3题

Elounda Co manufactures chemical compounds using a continuous production process. Its year

end was 31 July 20X6 and the draft profit before tax is $13·6 million. You are the audit supervisor and the year-end audit is due to commence shortly. The following matters have been brought to your attention.

(i) Revaluation of property, plant and equipment (PPE)

At the beginning of the year, management undertook an extensive review of Elounda Co’s non-current asset valuations and as a result decided to update the carrying value of all PPE. The finance director, Peter Dullman, contacted his brother, Martin, who is a valuer and requested that Martin’s firm undertake the valuation, which took place in August 20X5. (5 marks)

(ii) Inventory valuation

Your firm attended the year-end inventory count for Elounda Co and ascertained that the process for recording work in progress (WIP) and finished goods was acceptable. Both WIP and finished goods are material to the financial statements and the quantity and stage of completion of all ongoing production was recorded accurately during the count.

During the inventory count, the count supervisor noted that a consignment of finished goods, compound E243, with a value of $720,000, was defective in that the chemical mix was incorrect. The finance director believes that compound E243 can still be sold at a discounted sum of $400,000. (6 marks)

(iii) Bank loan

Elounda Co secured a bank loan of $2·6 million on 1 October 20X4. Repayments of $200,000 are due quarterly, with a lump sum of $800,000 due for repayment in January 20X7. The company met all loan payments in 20X5 on time, but was late in paying the April and July 20X6 repayments. (4 marks)

Required:

(a) Describe substantive procedures you should perform. to obtain sufficient, appropriate audit evidence in relation to the above three matters.

Note: The mark allocation is shown against each of the three matters above.

(b) Describe the procedures which the auditor of Elounda Co should perform. in assessing whether or not the company is a going concern. (5 marks)

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第4题

（a) Define audit risk and the components of audit risk. （5 marks)You are an audit supervis

(a) Define audit risk and the components of audit risk. (5 marks)

You are an audit supervisor of Amethyst & Co and are currently planning the audit of your client, Aquamarine Co (Aquamarine) which manufactures elevators. Its year end is 31 July 2016 and the forecast profit before tax is $15·2 million.

The company undertakes continuous production in its factory, therefore at the year end it is anticipated that work in progress will be approximately $950,000. In order to improve the manufacturing process, Aquamarine placed an order in April for $720,000 of new plant and machinery; one third of this order was received in May with the remainder expected to be delivered by the supplier in late July or early August.

At the beginning of the year, Aquamarine purchased a patent for $1·3 million which gives them the exclusive right to manufacture specialised elevator equipment for five years. In order to finance this purchase, Aquamarine borrowed $1·2 million from the bank which is repayable over five years.

In January 2016 Aquamarine outsourced its payroll processing to an external service organisation, Coral Payrolls Co (Coral). Coral handles all elements of the payroll cycle and sends monthly reports to Aquamarine detailing the payroll costs. Aquamarine ran its own payroll until 31 December 2015, at which point the records were transferred over to Coral.

The company has a policy of revaluing land and buildings and the finance director has announced that all land and buildings will be revalued at the year end. During a review of the management accounts for the month of May 2016, you have noticed that receivables have increased significantly on the previous year end and against May 2015.

The finance director has informed you that the company is planning to make approximately 65 employees redundant after the year end. No decision has been made as to when this will be announced, but it is likely to be prior to the year end.

Required:

(b) Describe SIX audit risks, and explain the auditor’s response to each risk, in planning the audit of Aquamarine Co. (12 marks)

(c) Explain the additional factors Amethyst & Co should consider during the audit in relation to Aquamarine Co’s use of the payroll service organisation. (3 marks)

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第5题

You are an audit senior of Scarlet & Co and are in the process of reviewing the system

s testing completed on the payroll cycle of Bronze Industries Co (Bronze), as well as preparing the audit programmes for the final audit.

Bronze operate several chemical processing factories across the country, it manufactures 24 hours a day, seven days a week and employees work a standard shift of eight hours and are paid for hours worked at an hourly rate. Factory employees are paid weekly, with approximately 80% being paid by bank transfer and 20% in cash; the different payment methods are due to employee preferences and Bronze has no plans to change these methods. The administration and sales teams are paid monthly by bank transfer.

Factory staff are each issued a sequentially numbered clock card which details their employee number and name. Employees swipe their cards at the beginning and end of the eight-hour shift and this process is not supervised. During the shift employees are entitled to a 30-minute paid break and employees do not need to clock out to access the dining area. Clock card data links into the payroll system, which automatically calculates gross and net pay along with any statutory deductions. The payroll supervisor for each payment run checks on a sample basis some of these calculations to ensure the system is operating effectively.

Bronze has a human resources department which is responsible for setting up new permanent employees and leavers. Appointments of temporary staff are made by factory production supervisors. Occasionally overtime is required of factory staff, usually to fill gaps caused by staff holidays. Overtime reports which detail the amount of overtime worked are sent out quarterly by the payroll department to production supervisors for their review.

To encourage staff to attend work on time for all shifts Bronze pays a discretionary bonus every six months to factory staff; the production supervisors determine the amounts to be paid. This is communicated in writing by the production supervisors to the payroll department and the bonus is input by a clerk into the system.

For employees paid by bank transfer, the payroll manager reviews the list of the payments and agrees to the payroll records prior to authorising the bank payment. If any changes are required, the payroll manager amends the records. For employees paid in cash, the pay packets are prepared in the payroll department and a clerk distributes them to employees; as she knows most of these individuals she does not require proof of identity.

Required:

(a) Identify and explain FIVE internal control STRENGTHS in Bronze Industries Co’s payroll system. (5 marks)

(b) Identify and explain SIX internal control DEFICIENCIES in Bronze Industries Co’s payroll system and provide a RECOMMENDATION to address each of these deficiencies. (12 marks)

(c) Describe substantive ANALYTICAL PROCEDURES you should perform. to confirm Bronze Industries Co’s payroll expense. (3 marks)

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第6题

Britain is basically an importer of （).

A.food

B.raw materials

C.manufactures

D.both A and B

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第7题

By using bar codes developed By Wal-Mart, manufactures enjoyed more says over retailers.A．

By using bar codes developed By Wal-Mart, manufactures enjoyed more says over retailers.