business-reporting-july-2010-marks-plan

Similarly the large fall in volumes compared to

Info icon This preview shows pages 20–23. Sign up to view the full content.

View Full Document Right Arrow Icon
Similarly, the large fall in volumes compared to previous years may not represent a normal usage basis in allocating fixed production costs to units of output An alternative explanation for the increase may be that there are fewer economies of scale arising from the smaller production runs from the lower volumes. Variable cost per unit may therefore have risen. As we are relying on budget data, review of the budgeting process and its historic accuracy A key audit concern is that the analysis implies there is a risk that revenue and cost of sales of the Gold may both be materially understated.
Image of page 20

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon