An internal auditor is investigating the performance of a division with an unusually large increase in sales, gross margin, and profit.
Assume that the analysis shows unusually high sales and gross margin during the months of November and December and the internal auditor wishes to investigate further. Which of the following engagement procedures will be most effective in analyzing whether fraudulent sales may have been recorded?

A.   Take a sample of shipping documents and compare them with the related sales invoices, noting that all items were properly billed.
B.   Confirm accounts receivable with large customers.
C.   Perform an analytical review comparing sales and gross margin with the previous 10 months and the first month of the following year.
D.   Use regression analysis techniques for the first 10 months to estimate the sales and cost of goods sold for the last 2 months.

Inventory Costing Methods - Periodic Method Fortune Stores uses the periodic inventory system for its merchandise inventory. The April 1 inventory for one of the items in the merchandise inventory consisted of 120 units with a unit cost of $355. Transactions for this item during April were as follows:

Required a. Calculate the cost of goods sold and the ending inventory cost for the month of April using the weighted-average cost method. Do not round until your final answers. Round your final answers to the nearest dollar. b. Calculate the cost of goods sold and the ending inventory cost for the month of April using the first-in, first-out method. c. Calculate the cost of goods sold and the ending inventory cost for the month of April using the last-in, first-out method.

April 9 Purchased 40 units @ $375 per unit

14 Sold 80 units @ $580 per unit

23 Purchased 20 units @ $380 per unit

29 Sold 40 units

a. Weighted Average Ending Inventory Cost of goods Sold?

b. First-in, First-out: Ending Inventory Cost of Goods Sold?

c. Last-in, first-out: Ending Inventory Cost of Goods Sold?

Inventory Costing Methods-Perpetual Method

Kali Company uses the perpetual inventory system for its merchandise inventory. The June 1 inventory for one of the items in the merchandise inventory consisted of 60 units with a unit cost of $45. Transactions for this item during June were as follows:

Required
a. Compute the cost of goods sold and the ending inventory cost for the month of June using the weighted-average cost method. Do not round until your final answers. Round to the nearest dollar.

b. Compute the cost of goods sold and the ending inventory cost for the month of June using the first-in, first-out method.

c. Compute the cost of goods sold and the ending inventory cost for the month of June using the last-in, first-out method.

a) Weighted average

Ending Inventory:

Cost of goods sold:

b) First in, First out:

Ending Inventory:

Cost of goods sold:

c) Last in, First Out:

Ending Inventory:

Cost of goods sold:

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,200 helmets, using 2,336 kilograms of plastic. The plastic cost the company $15,418.

According to the standard cost card, each helmet should require 0.65 kilograms of plastic, at a cost of $7.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,200 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,200 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,400 helmets, using 2,142 kilograms of plastic. The plastic cost the company $16,279.

According to the standard cost card, each helmet should require 0.56 kilograms of plastic, at a cost of $8.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,400 helmets, using 2,142 kilograms of plastic. The plastic cost the company $16,279.

According to the standard cost card, each helmet should require 0.56 kilograms of plastic, at a cost of $8.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,400 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,400 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,600 helmets, using 2,052 kilograms of plastic. The plastic cost the company $15,595. According to the standard cost card, each helmet should require 0.51 kilograms of plastic, at a cost of $8.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,600 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,600 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,800 helmets, using 2,660 kilograms of plastic. The plastic cost the company $17,556.

According to the standard cost card, each helmet should require 0.63 kilograms of plastic, at a cost of $7.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,800 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,800 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?

Bandar Industries Berhad of Malaysia manufactures sporting equipment. One of the company’s products, a football helmet for the North American market, requires a special plastic. During the quarter ending June 30, the company manufactured 3,300 helmets, using 2,310 kilograms of plastic. The plastic cost the company $17,556.

According to the standard cost card, each helmet should require 0.61 kilograms of plastic, at a cost of $8.00 per kilogram.

Required:

1. What is the standard quantity of kilograms of plastic (SQ) that is allowed to make 3,300 helmets?

2. What is the standard materials cost allowed (SQ × SP) to make 3,300 helmets?

3. What is the materials spending variance?

4. What is the materials price variance and the materials quantity variance?