Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Chapter 10, Problem 2TP
You are a
A. What are some of the internal control problems you foresee as a result of our sourcing the janitorial service with this contract?
B. Explain recommendations to control risk that would you suggest after reviewing the contract.
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The Tennis Club Company makes custom tennis rackets. The manufacturing supervisor interviews people who have specialized manufacturing skills for recruitment, and he informs payroll when an employee is hired. The employees punch a card to a time clock to record the hours they work. The employees are also required to keep a record of the time they spend working on each order. The supervisor approves all time cards.
The accountant analyzes the job tickets and prepares a labor distribution summary. Payroll prepares the payroll register and paychecks. The supervisor distributes the paychecks to the employees. Payroll informs cash disbursement of the funds required to cover the entire payroll amount. The cash disbursements clerk ensures that there are adequate funds in the company's regular checking account to cover the payroll.
Required:
1. Identify and discuss three internal control weaknesses.
2. Suggest an improvement to internal control for each weakness.
Oak Enterprises allows employees to purchase, at cost, manufacturing materials, such as metal and lumber, for personal use. To purchase materials for personal use, an employee must complete a materials requisition form, which must then be approved by the employee's immediate supervisor. Cheryl Long, an assistant cost accountant, charges the employee an amount based on Oak's net purchase cost. Cheryl Long is in the process of replacing a deck on her home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Long reviewed all the purchase invoices for the past year. She then used the lowest price to compute the amount due the company for the lumber. Discuss whether Cheryl behaved in an ethical manner. Support your answer.
Ethics in ActionAvett Manufacturing Company allows employees to purchase materials, such as metal and lumber, for personal use at a price equal to the company’s cost. To purchase materials, an employee must complete a materials requisition form, which must then he approved by the employee’s immediate supervisor. Brian Dadian, an assistant cost accountant, then charges the employee an amount based on Avett’s net purchase cost. Brian is in the process of replacing a deck on his home and has requisitioned lumber for personal use, which has been approved in accordance with company policy. In computing the cost of the lumber, Brian reviewed all the purchase invoices for the past year, He then used the lowest price to compute the amount due the company for the lumber.The Institute of Management Accountants (IMA) is the professional organization for managerial accountants. The IMA has established four principles of ethical conduct for its members: honesty, fairness, objectivity, and…
Chapter 10 Solutions
Principles of Accounting Volume 2
Ch. 10 - ______ are the costs associated with not choosing...Ch. 10 - Which type of incurred costs are not relevant in...Ch. 10 - The managerial decision-making process has which...Ch. 10 - Which of the following is not one of the five...Ch. 10 - Which of the following is sometimes referred to as...Ch. 10 - Jansen Crafters has the capacity to produce 50,000...Ch. 10 - ______ is the act of using another company to...Ch. 10 - Which of the following is a disadvantage of...Ch. 10 - Which of the following is not a qualitative...Ch. 10 - Which of the following is one of the two...
Ch. 10 - When should a segment be dropped? A. only when the...Ch. 10 - Youngstown Construction plans to discontinue its...Ch. 10 - Mallorys Video Supply has changed its focus...Ch. 10 - A company produces two products. E and F in...Ch. 10 - When operating in a constrained environment, which...Ch. 10 - Your roommate at school believes that all fixed...Ch. 10 - Explain how to differentiate short-term decisions...Ch. 10 - Felipes Restaurant and Pie Shop needs help...Ch. 10 - What factors must any company consider before...Ch. 10 - What are some of the qualitative issues that a...Ch. 10 - In The Trouble with Outsourcing, a Schumpeter...Ch. 10 - Many outsourced jobs have resulted in offshoring...Ch. 10 - What type of qualitative issues should management...Ch. 10 - In the decision by a grocery company that is...Ch. 10 - What is of key importance for a company whose...Ch. 10 - What is a general rule to remember with respect to...Ch. 10 - Garrison Boutique, a small novelty store, just...Ch. 10 - Derek DingIer conducts corporate training seminars...Ch. 10 - Bridget Youhzi works for a large firm. Her alma...Ch. 10 - Zena Technology sells arc computer printers for...Ch. 10 - Shelby Industries has a capacity to produce 45.000...Ch. 10 - Reubens Deli currently makes rolls for deli...Ch. 10 - Almond Treats manufactures various types of...Ch. 10 - Party Supply is trying to decide whether or not to...Ch. 10 - Underground Food Store has 4,000 pounds of raw...Ch. 10 - Ralston Dairy gathered this data about the two...Ch. 10 - Rough Stuff makes 2 products: khaki shorts and...Ch. 10 - Rough Stuff makes 2 products: khaki shorts and...Ch. 10 - Ella Maksimov is CEO of her own marketing firm....Ch. 10 - You are trying to decide whether to take a job...Ch. 10 - You are working for a large firm that has asked...Ch. 10 - Dimitri Designs has capacity to produce 30,000...Ch. 10 - Aspen Enterprises makes award pins for various...Ch. 10 - Country Diner currently makes cookies for its...Ch. 10 - Oat Treats manufactures various types of cereal...Ch. 10 - The Party Zone is trying to decide whether or not...Ch. 10 - Berettis Food Mart has 6,000 pounds of raw pork...Ch. 10 - Balcom Dairy gathered this data about the two...Ch. 10 - Power Corp. makes 2 products: blades for table...Ch. 10 - Power Corp. makes 2 products: blades for table...Ch. 10 - Artisan Metalworks has a bottleneck in their...Ch. 10 - Syntech makes digital cameras for drones. Their...Ch. 10 - Marcotti Cupcakes bakes and sells a basic cupcake...Ch. 10 - Ken Owens Construction specializes in small...Ch. 10 - Boston Executive. Inc., produces executive...Ch. 10 - Gent Designs requires three units of part A for...Ch. 10 - Trifecta Distributors has decided to discontinue...Ch. 10 - Extreme Sports sells logo sports merchandise. The...Ch. 10 - Hong Publishing has purchased Lang Publishing....Ch. 10 - Clarion Industries produces two joint products, Y...Ch. 10 - Quality Clothing, Inc., produces skorts and jumper...Ch. 10 - Ac Gems in the Rough, a jewelry company, the...Ch. 10 - Sports Specialists makes baseballs and softballs...Ch. 10 - Variety Artisans has a bottleneck in their...Ch. 10 - Mortech makes digital cameras for drones. Their...Ch. 10 - Cinnamon Depot bakes and sells cinnamon rolls for...Ch. 10 - Myrna White is a mobile housekeeper. The price for...Ch. 10 - Blake Cohen Painting Service specializes in small...Ch. 10 - Regal Executive, Inc., produces executive motor...Ch. 10 - Remarkable Enterprises requires four units of part...Ch. 10 - Colin OShea has a carpentry shop that employs 4...Ch. 10 - ZZOOM, Inc., has decided to discontinue...Ch. 10 - Strawberry Sweet Company makes a variety of jams...Ch. 10 - Laramie Industries produces two joint products, H...Ch. 10 - Jamboree Outfitters, Inc., produces pocket knives...Ch. 10 - Daisy Hernandez sells girls christening dresses...Ch. 10 - Dr. Detail is a mobile car wash. The price for a...Ch. 10 - At Stardust Gems, a faux gem and jewelry company,...Ch. 10 - Sports Butts makes basketballs and footballs in a...Ch. 10 - Seda Sarkisian makes wedding cakes from her home....Ch. 10 - You are a management accountant for Time Treasures...Ch. 10 - Brindis Babysitting Center currently rents a 1200...Ch. 10 - Akimotos Bicycle Co assembles three types of...
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