Cost Data for Financial Reporting and Special Order Decisions

Friendly Greeting Card Company produces a full range of greetings cards sold through pharmacies and department stores. Each card is designed by independent artists. A production master is then prepared for each design. The production master has an indefinite life. Product designs for popular cards are deemed to be valuable assets. If a card sells well, many batches of the design will be manufactured over a period of years. Hence, Friendly Greeting maintains an inventory of production masters so that card may be periodically reissued. Cards are produced in batches that may vary by increments of 1,000 units. An average batch consists of 10,000 cards. Producing a batch requires placing the production master on the printing press, setting the press for the appropriate paper size, and making other adjustments for colors and so forth. Following are facility-, product-, and unit-level cost information:

Product design and production master per new card…………… $ 2,000.00

Batch setup (typically per 10,000 cards)…………………………. 200.00

Materials per 1,000 cards………………………………………….. 100.00

Conversion per 1,000 cards……………………………………….. 80.00

Shipping Per batch…………………………………………………………... 25.00

Per card……………………………………………………………. 0.02

Selling and administrative

Companywide…………………………………………………….. 200,000.00

Per product design marketed…………………………………… 500.00

Information from previous year...

Products designs and masters prepared for new cards……….. 90

Product designs marketed………………………………………… 120

Batches manufactured…………………………………………….. 500

Cards manufactured and solid……………………………………. 5,000,000

QUESTIONS:

a. Describe how you would determine the cost of goods sold and the value of any ending inventory for financial reporting purposes. (No computations are required.)

b. You have just received an inquiry from Walgreens stores to develop and manufacture 20 special designs for sale exclusively in Walgreens stores. The cards would be sold for $1.50 each, and Walgreens would pay Friendly Greeting $0.35 per card. The initial order is for 20,000 cards of each design. If the cards sell well, Walgreens plans to place additional orders for these and other designs. Because of the preestablished sales relationship, no marketing costs would be associated with the cards sold to Walgreens. How would you evaluate the desirability of the the Walgreens proposal?

c. Explain any differences between the costs considered in your answer to requirements (a) and the costs considered in your answers to requirements (b).

Create a mobile application using Android studio, for cinema tickets reservation. The application will be used by the customers to book cinema tickets. Only users of 15 years old and above are allowed to book cinema tickets for a particular film. The user can book more than one ticket where ticket prices vary between 20 and 50 AED. Your app contains tree Activities. The first activity is a launching activity containing a logo and a button start. When the user press the “Start” button the second activity will appear. The second activity is composed of three Editexts and a button; the name of the user, the user age, and the movie title the button “Reserve” is used to move to the third activity. In the third activity contains a TextView displaying the user name and the movie title, two EditTexts : Price of a ticket and the number of tickets, a button “Calculate Total” used to calculate and to confirm the reservation. First activity: 1. There should be an ImageView to display the logo of the app (Choose any icon). 2. There should be a button “Start”, when the user press this button he should be able to move to the second activity. Second activity: 1. There should be an Editext field for user to enter his/her name; this Editext must not be left empty. 2. There should be an Editext field for user to enter a valid value of his/her age. Appropriate keyboard must be displayed accordingly for the user input. The user age must be 15 and above. The Editext field relative to the user age must not be left empty. 3. There should be an Editext field for user to enter the movie title. For example Avatar, Matrix, Batman, etc. The EdiText field relative to the movie title must not be left empty. 4. There should be a button field “Reserve” for user to move to the third activity. User should be able to pass the user name and the movie title from the second activity to the third activity, which will be displayed as a textbox on the top of the third activity. Third activity: 5. There should be an EditText field for user to enter the price of a single ticket. Ticket prices vary between 20 and 50 AED, this Editext field must not be left empty. 6. User should be able to enter in an EditText how many tickets he/she is booking. Appropriate keyboard must be displayed accordingly for the user input. The user can reserve minimum 1 and maximum 10 tickets at a time.

Short Writing

“The Public Company Accounting Oversight Board adopted a new auditor reporting standard that will make the auditor's report more relevant to investors by requiring more information about the audit.

The standard includes the communication of critical audit matters (CAMs), which will inform investors and other financial statement users of matters arising from the audit that required especially challenging, subjective, or complex auditor judgment, and how the auditor responded to those matters.” (PCAOB 2017)

I have attached the Fact Sheet from the June 1, 2017 PCAOB Press Release: PCAOB Adopts New Standard to Enhance the Relevance and Usefulness of the Auditor's Report with Additional Information for Investors:

https://pcaobus.org/News/Releases/Pages/fact-sheet-auditors-report-standard-adoption-6-1-17.aspx

I have also attached the Final Audit Standard - PCAOB Release No. 2017-001 June 1, 2017 PCAOB Rulemaking Docket Matter No. 034 - to the assignment in TCU Online and provided the link below:

https://pcaobus.org/News/Releases/Pages/fact-sheet-auditors-report-standard-adoption-6-1-17.aspx

Please prepare a brief, but thoughtful, note commenting on this topic. What are the arguments for and against the additional disclosure? Do you think that the PCAOB made the right decision? If you were a partner at a public accounting firm, would you be for or against the additional disclosure? Why? Please limit your response to 250 words or fewer not including reference list.

*You are not limited to the resources noted.

References:

Public Company Accounting Oversight Board (PCAOB). 2017, June. Fact Sheet: Adoption of an Auditing Standard on the Auditor’s Report. June 1, 2017 Press Release Washington, D.C.: PCAOB

Retrieved from:

https://pcaobus.org/News/Releases/Pages/fact-sheet-auditors-report-standard-adoption-6-1-17.aspx

Public Company Accounting Oversight Board (PCAOB). 2017, June. PCAOB Release No. 2017-001. The Auditor's Report On An Audit Of Financial Statements When The Auditor Expresses An Unqualified Opinion And Related Amendments To PCAOB Standards. Washington, D.C.: PCAOB

Retrieved From:

https://pcaobus.org/News/Releases/Pages/fact-sheet-auditors-report-standard-adoption-6-1-17.aspx

Cost Data for Financial Reporting and Special Order Decisions

Friendly Greeting Card Company produces a full range of greetings cards sold through pharmacies and department stores. Each card is designed by independent artists. A production master is then prepared for each design. The production master has an indefinite life. Product designs for popular cards are deemed to be valuable assets. If a card sells well, many batches of the design will be manufactured over a period of years. Hence, Friendly Greeting maintains an inventory of production masters so that card may be periodically reissued. Cards are produced in batches that may vary by increments of 1,000 units. An average batch consists of 10,000 cards. Producing a batch requires placing the production master on the printing press, setting the press for the appropriate paper size, and making other adjustments for colors and so forth. Following are facility-, product-, and unit-level cost information:

Product design and production master per new card…………… $ 2,000.00

Batch setup (typically per 10,000 cards)………………………….       200.00

Materials per 1,000 cards…………………………………………..       100.00

Conversion per 1,000 cards………………………………………..         80.00

Shipping

   Per batch…………………………………………………………...         25.00

   Per card…………………………………………………………….           0.02

Selling and administrative

   Companywide…………………………………………………….. 200,000.00

   Per product design marketed……………………………………         500.00

Previous year

Products designs and masters prepared for new cards………..                90

Product designs marketed…………………………………………              120

Batches manufactured……………………………………………..              500

Cards manufactured and solid…………………………………….    5,000,000

Required

a.         Describe how you would determine the cost of goods sold and the value of any ending inventory for financial reporting purposes. (No computations are required.)

b.         You have just received an inquiry from Walgreens stores to develop and manufacture 20 special designs for sale exclusively in Walgreens stores. The cards would be sold for $1.50 each, and Walgreens would pay Friendly Greeting $0.35 per card. The initial order is for 20,000 cards of each design. If the cards sell well, Walgreens plans to place additional orders for these and other designs. Because of the preestablished sales relationship, no marketing costs would be associated with the cards sold to Walgreens. How would you evaluate the desirability of the the Walgreens proposal?

c.         Explain any differences between the costs considered in your answer to requirements (a) and the costs considered in your answers to requirements (b).

For each case history provide:

1. a diagnosis;
2. list the criteria required for the diagnosis; and
3. provide examples from the case history for each of the criteria listed.
   For example, if one of the criteria for a diagnosis is "delusions", then you should list "delusions, e.g., believes he is receiving special/hidden messages from television programs that he only understands".

Milo Tark (Morrison, 1995, pp. 476-477)

Milo Tark was 23, good-looking, and smart. When he worked, he was well paid as a heating and air conditioning installer. He had got into that trade when he left high school, which happened somewhere in the middle of his 10th-grade year. Since then, he had had at least 15 different jobs; the longest of them had lasted six months.

Milo was referred for evaluation after he was caught trying to con money from elderly patrons at an automatic teller machine (ATM). The machine was one of two that served the branch bank where his mother worked as assistant manager.

"The little devil!" his father exclaimed during the initial interview. "He was always a difficult one to raise, even when he was a kid. Kinda reminded me of me, sometimes. Only I pulled out of it."

Milo picked a lot of fights when he was a boy. He had bloodied his first nose when he was only five, and the world-class spanking his father had given him had taught him nothing about keeping his fists to himself. Later he was suspended from the seventh grade for extorting $3 and change from an eight-year-old. When the suspension was finally lifted, he responded by ditching class for 47 straight days. Then began a string of encounters with the police beginning with shoplifting (condoms) and progressing through breaking and entering (four counts) to grand theft auto when he was 15. For stealing the Toyota, he was sent for half a year to a camp run by the state youth authority. "It was the only six months his mother and I ever knew where he was at night," his father observed.

Milo's time in detention seemed to have done him some good, at least initially. Although he never returned to school, for the next two years he avoided arrest and intermittently applied himself to learning his trade. Then he celebrated his 19th birthday by getting drunk and joining the Army. Within a few months he was out on the street again, with a bad-conduct discharge for sharing cocaine in his barracks and assaulting two corporals, his first sergeant, and a second lieutenant. For the next several years, he worked when he needed cash and couldn't get it any other way. Not long before this evaluation, he had gotten a 16-year-old girl pregnant.

"She was just a ditsy broad." Milo lounged back, one leg over the arm of the interview chair. He had managed to grow a scraggly beard, and he rolled a toothpick around in the corner of his mouth. The letters H-A-T-E and L-O-V-E were clumsily tattooed across the knuckles of either hand. "She didn't object when she was gettin' laid."

Milo's mood was good now, and he had never had anything that resembled mania. There had never been symptoms of psychosis, except for the time he was coming off speed. He "felt a little paranoid" then, but it didn't last.

The ATM job was a scam thought up by a friend. The friend had read something like it in the newspaper and decided it would be a good way to obtain fast cash. They had never thought they might get caught, and Milo hadn't considered the effect it would have on his mother. He merely yawned and said, "She can always get another job."

Breathtaking': Fake mortgage broker case reveals widespread problems In a real estate market saturated with stories about money laundering, offshore conniving and even murder-related property depreciation — it's easy for allegations against one unlicensed mortgage broker to get lost in the fray. After all, British Columbia is used to stunning examples of greed and deception. But the activity outlined in last week's cease and desist order against Jay Kanth Chaudhary is something different entirely. Not just because Chaudhary is accused of using fake financial documents to dupe lenders into giving out half a billion dollars worth of loans. But because an entire network of licensed professionals are being investigated for helping. And because hundreds of customers were allegedly willing to turn a blind eye if it helped them get a mortgage. "I guess to me what's remarkable is the widespread apparent — there's no word for it really other than 'corruption' — of licensed people," says Ron Usher, a professor of property law at Simon Fraser University.1 … 1 Source: CBC News Online, June 4, 2019: https://www.cbc.ca/news/canada/british-columbia/mortgage-fraud-realestate-corruption-1.5160842

Read the news story above by clicking on the link above. Answer the following questions: 1. Explain what is happening in this news story. Give a brief summary. 2. What is wrong with the system used in this story to help people borrow money? 3. Accurate Information: a. Is it true that the system of financial institutions must have accurate information in order for the system to work? b. Why does it matter that the institutions have accurate information? 4. Regulation: a. Is regulation of financial institutions still important in Canada? b. Why or why not?

Q.Explain the flaws in the following analysis or conclusion. (Note that this is not about chi-squared test per se, perhaps, it is about what a statistical analysis (hypothesis testing in this case) can tell us and what it cannot) Background - The Scholarship Committee comprises 3 faculty members, one of whom is Professor X. Professor X also wrote recommendation letter for 5 students who took his class earlier and four of them were awarded scholarships (out of a total of six scholarships awarded to graduate students). A student who applied but was not awarded a scholarship accused Professor X of favoritism, claiming that he/she was denied a scholarship despite having a very high GPA because he/she did not take class under Professor X and had declined him/her a recommendation letter. The student then did following statistical analysis as an evidence of favoritism . The student runs a Chisq-test and his result shows not independent between students who took class under Professor X and Students got scholarship. H0: students who get scholarship is independent with whether they have taken class under Professor X H1: not independent # Let total number of students who applied for scholarship is 70, and only 5 people get the scholarship, conservatively estimate only 3 out of 5 students took Class with ProfessorX, the other two selected did not take Class with ProfessorX # chisquare test shows the p-value <0.05, thus we reject H0 at .05 level and conclude students who got scholarship was affected by whether they have class under Professor X #student in addition tests , how about the total applicants were 60, or 80? and find out either case we reject H0, they are not independent.

Q.Explain the flaws in the following analysis or conclusion. (Note that this is not about chi-squared test per se, perhaps, it is about what a statistical analysis (hypothesis testing in this case) can tell us and what it cannot)

Background - The Scholarship Committee comprises 3 faculty members, one of whom is Professor X. Professor X also wrote recommendation letter for 5 students who took his class earlier and four of them were awarded scholarships (out of a total of six scholarships awarded to graduate students). A student who applied but was not awarded a scholarship accused Professor X of favoritism, claiming that he/she was denied a scholarship despite having a very high GPA because he/she did not take class under Professor X and had declined him/her a recommendation letter. The student then did following statistical analysis as an evidence of favoritism .

The student runs a Chisq-test and his result shows not independent between students who took class under Professor X and Students got scholarship.

H0: students who get scholarship is independent with whether they have taken class under Professor X

H1: not independent

# Let total number of students who applied for scholarship is 70, and only 5 people get the scholarship, conservatively estimate only
3 out of 5 students took Class with ProfessorX, the other two selected did not take Class with ProfessorX

# chisquare test shows the p-value <0.05, thus we reject H0 at .05 level and conclude students who got scholarship was affected by whether they have class under Professor X

#student in addition tests , how about the total applicants were 60, or 80?
and find out either case we reject H0, they are not independent.