1. Planninganauditinvolveswhichofthefollowingsteps:
a.
b.
c.
d.
riskassessment.
collectinginformationconcerningtheclientsinformationsystem.
collectinginformationabouttheclient.
Alloftheabove.
2. Iftheauditordecidesthattheinternalcontrolsarenotdesignedappr
1Chapter 1
The Demand for Audit and Other Assurance Services
Review Questions
1-1
The relationship among audit services, attestation services, and assurance
services is reflected in Figure 1-3 on page 13 of the text. An assurance service is
an independent
manipulation questions. The emphasis in the exam will therefore be
on understanding the mathematical techniques and applying them to
various, frequently unfamiliar, situations. It is important to have a feel
for what the numerical answer should be by havi
labor. Suggest the best production plan in each case and the resultant
profi t that the company would earn according to your suggestion.
Solution: The following statement is prepared to compute the
contribution per unit and for deciding best production pl
Rs. Amount Rs. Prime Cost [Material consumed + wages] 8, 00, 000
Factory overheads 25% on prime cost 2, 00, 000 Works Cost 10, 00,
000 Offi ce Overheads 75% on factory overheads 1, 50, 000 Cost of
Production 11, 50, 000 B] Statement Showing Profi t as per
should be increased by 25% as the profit/volume ratio for the same is
highest. Thus the production and sale units will be 25% higher, i.e. 20
000 + 25% of 20 000 = 25 000 units. 14. A company has compiled the
following data for the preparation of its budg
company having a normal production capacity of 60, 000 units for the
year ended 31st March 2007. a) Sales Rs.10, 00, 000 [50, 000 units] b)
There was no opening and closing of fi nished units. c) Direct material
and direct wages cost were Rs.5, 00, 000 an
possible as the requirement is 3 kg per unit. * Fixed cost per unit is
given Rs.5 for product A, hence total fi xed cost for A is Rs.17,500 *
Fixed cost per units is Rs.10 for B and hence total fi xed cost for B is
Rs.35,000 12. P Ltd. manufactures and se
Dividend Interest received Total 6, 00, 000 1, 20, 000 44, 000 1, 00, 000
20, 000 8, 84, 000 Total 14, 49, 160 Less: Expenses not recorded in cost
accounts Legal charges Preliminary expenses written off Bad debts
Total 10, 000 40, 000 80, 000 1, 30, 000 L
direct labor cost per unit of each product by direct labor rate per hour,
which is Rs.15 The next step in the problem is to work out the amount
of profi t as per the production plan prepared by the company. This
computation is shown in the next statement.
Rs.7.50 Revised contribution per unit = Rs.7.50 Profi t/volume ratio =
Rs.7.50/Rs.15 100 = 50% Let be the amount of sales to earn desired
profi t, the amount of sales will be computed with the help of the
following formula S = Fixed Cost + Desired Profi t
machine hour, will have to be promoted for maximizing the profi ts.
The following statement is prepared for this purpose: Cost and
Management Accounting Marginal Costing and Break Even Analysis
294 Statement showing Comparative Analysis of the two Export
suspend the companys operations in the current year. Cost and
Management Accounting Marginal Costing and Break Even Analysis
300 Solution: Statement Showing Comparative Profi ts Particulars
Continuing Operations at 50% capacity Rs. Shut-down the factory R
extracted from the records of a company. Particulars Product A
Product B Sale price per unit Rs.100 Rs.120 Consumption of material 2
kg 3 kg Material cost Rs.10 Rs.15 Direct labour cost 15 10 Direct
expenses 5 6 Machine hours used 3 2 Fixed overheads per
Assuming 60% capacity is used for manufacture of A and B, calculate,
I] Present cost and profi t II] Cost and profi t after diversifi cation III]
Give your recommendations as to whether to diversify or not. Cost
and Management Accounting Marginal Costing
identify various costs under different headings. The headings used
are, Fixed or standing charges Semi-fi xed or maintenance charges
Variable or running charges. One of the important features of
operating costing is that mostly such costs are fi xed in na
and the Series X assignments. Collectively, these are referred to as the
Combined Materials Pack (CMP). 2.1 Course Notes Each chapter of the
Course Notes includes the Syllabus, a chapter summary and, where
appropriate, a page of important formulae or defi
introduced in this subject. Subjects ST1 Health and Care Specialist
Technical. Subject ST7 General Insurance Reserving and Capital
Modelling Specialist Technical. Subject ST8 General Insurance
Pricing Specialist Technical use the mathematics developed in
part of the notes before attending as the tutor will introduce the
material, key concepts and principles that you will need to master for
the exam. The course will not replace the need to read the notes, but
it will enable you to work through the material
appropriate textbook. The full Syllabus for FAC, a sample of the Course
Notes and an Initial Assessment to test your mathematical skills can
be found on our website at www.acted.co.uk. Q: What should I do if I
discover an error in the course? A: If you fi
understand the examiners point of view and should mean that there
are fewer nasty surprises in the exam room! Use the Syllabus to help
you make up questions. 3. Annotate your notes with your own ideas
and questions. This will make you study more actively
independent random variables each having a compound Poisson
distribution also has a compound Poisson distribution. 5. Derive the
mean, variance and coefficient of skewness for compound binomial,
compound Poisson and compound negative binomial random
varia
you can refer when you need help on a particular topic. You will have
sat many exams before and will have mastered the exam and revision
techniques that suit you. However it is important to note that due to
the high volume of work involved in the CT Subje
chapter. As you study, pay particular attention to the listing of the
Syllabus Objectives and to the Core Reading. 4. Read the Chapter
Summary again carefully. If there are any ideas that you cant
remember covering in the Course Notes, read the relevant s
both with and without limits and risk-sharing arrangements. (Chapters
3 and 4) 1. Describe the properties of the statistical distributions
which are suitable for modelling individual and aggregate losses. 2.
Derive moments and moment generating functions
assumption that students have studied Subject CT3. If your knowledge
of Subject CT3 is rusty, you might like to revisit some of the CT3
material before you start Subject CT6 (in particular moment
generating functions, methods of estimation, and the introd
Min 667 Rs.35 Rs.35, 000 D 500 Min 534 Rs.46 Rs.23, 000 Total 14, 000
Rs.8, 67, 895 Amount of maximum profi t = Total Contribution Total
Fixed Cost Rs.8, 67,895 Rs.3, 33,000 = Rs.5, 34, 895 * Number of
units X labour hours per unit 13. XY Ltd. is manufact
materials Direct labor Production overheads variable Production
overheads fi xed Administrative overheads fi xed Selling and
distribution overheads variable Selling and distribution overheads fi xed 3, 00,000 2, 00,000 60,000 3,00,000 1, 50,000 90, 000 1,
prepared. I] Statement Showing the Current Profi t Output and sales
of Product Z = 800 units Particulars Amount [Rs.] Selling price per unit
300 Less: Variable cost including assembling per unit 218 Contribution
per unit 82 Total contribution 800 units X