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    Audit of Sales Operation and Cost Projection

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    vsplancia

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    Audit of Sales Operation and Cost Projection

    Uploaded by

    vsplancia
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    12 views2 pages

    Audit of Sales Operation and Cost Projection

    Uploaded by

    vsplancia

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    Audit of Sales, Operation and Cost Projection

    For number 1 to 11
    You audited the Management Income Statement of an auditee, you considered the significant
    effect of this presentation in the Financial Statements, you considered a materiality
    threshold of P250,000 in the Profit or Loss Statement. You able to audit the following data:

    Total goods manufactured 352,809


    Materials avaliable for use 398,950
    Goods available for sale 564,686
    Finished goods, beginning 211,877
    Sales (P2,800 @ 360 units)
    Total variable cost 431,083
    Finished goods, end 117,218
    Direct labor 35,120
    Conversion cost 67,850
    Materials, beginning 215,200
    Materials, end 108,115
    Net purchases 183,750
    Purchase returns and allowances 15,000
    Freight in 750
    Work in progress, beg 25,815
    Work in progress, end 31,691
    Purchase discount 12,500
    OPEX (60% of the gross profit)

    Management accountant presentation


    Sales 2,678,148
    Cost of goods sold (Variable cost) - 431,083
    Gross profit 2,247,065
    OPEX 1,348,239
    Net Income 898,826

    Findings:
    1 Management accountant is suspected to record sales without substance
    2 Management accountant claims that the company's break-even points is 107 units and
    selling 415 units will give the company an exact P1.5 million net positive operation.

    Compute and identify the following:


    1 Gross purchases
    a 310,500 d 210,500
    b 211,581 e Correct answer not stated
    c 183,750

    2 Total Goods put into process


    a 384,500 d 310,500
    b 444,850 e Correct answer not stated
    c 210,810
    3 Gross profit
    a 560,532 d 450,122
    b 664,185 e Correct answer not stated
    c 502,410

    4 Cost formula
    a y = 352,704 + 2,800 x d y = 352,704 + 1,602.55 x
    b y = 336,319 + 2,800 x e Correct answer not stated
    c y = P352,704 + P1,197.45 x

    5 Break-even points in units


    a 220 units d 190 units
    b 210 units e Correct answer not stated
    c 315 units

    6 Break-even points in peso


    a 750,511 d 619,481
    b 611,254 e Correct answer not stated
    c 616,251

    7 Units need to sell to earn P680,000


    a 750 units d 618 units
    b 715 units e Correct answer not stated
    c 644 units

    8 Margin of safety
    a 411,288 d 247,158
    b 319,750 e Correct answer not stated
    c 391,750

    9 Margin of Safety ratio


    a 25.78% d 38.86%
    b 36.47% e Correct answer not stated
    c 32.45%

    10 Total cost if the company sells 415 units


    a 849,645.75 d 847,641.12
    b 744,254.11 e Correct answer not stated
    c 814,788.12

    11 Units to produce if the allotted budget is only P785,500


    a 361 units d 407 units
    b 368 units e Correct answer not stated
    c 411 units

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