1. Suppose that 50% of the 60 farms in Region 1 use fertilizer on their soybean crop but only 40% of the 40 farms in Region 2 fertilize their soybeans. Is the percentage of farms fertilizing their soybean crop significantly lower in Region 2 as opposed to Region 1? Conduct a hypothesis test at a = 0.10 significance level and construct the corresponding confidence interval to support your analysis.

H₀: _________________________________________

H_a: _________________________________________

left-tail            right-tail                      two-tail

z-test                t-test                df = _________________

test statistic: _________________________

critical value: ________________________

p-value: ____________________________

____ % confidence interval: __________________________

The following is a list of 12 control plans from this chapter or from Chapters 8 and 9. These are followed by a list of 10 system failures that have control implications. Match the 10 system failures with a control plan that would best prevent the system failure from occurring. Write one or two sentences explaining each answer. Because there are 12 control plans, you should have two letters left over.

Control Plans

A. Enter customer order close to where customer order is prepared

B. Turnaround document

C. Independent shipping authorization

D. Populate input screens with master data

E. One-for-one checking of the goods, picking ticket, and sales order

F. Preformatted screens

G. Confirm input acceptance

H. Reasonableness check

I. Backup procedures (for data)

J. Program change controls

K. Digital signature

L. Personnel termination controls

System Failures

1. Handsome Corp. has recently received customer complaints that the goods they receive frequently are not accurate. Sometimes they receive the wrong goods and sometimes the wrong quantity.

2. Eagle Company receives Internet orders from established customers. Recently the company received a number of orders from individuals impersonating legitimate customers.

3. A recent audit of the order-entry process at James, Ltd. determined that the clerks were making many errors while entering data such as the customer’s name and address from the customer order documents.

4. A former employee of Vittoria Corp, gained access to the order entry department after hours and logged on to the system using her old user ID. She entered an order for a legitimate customer but instructed the system to ship the goods to her home address.

5. Little Field, Inc.’s field salespeople record customer orders on prenumbered order forms and then forward the forms to central headquarters for processing. Jolita Prtyzakz, one of the company’s topsalespeople, mailed 40 customer orders to headquarters on one Friday afternoon. Unfortunately, they were misplaced in the mail and did not reach headquarters until two weeks later.

6. Bright Skies Inc.’s clerks key order data into the order entry system at one of several PCs. During the first week of using this system, every sales order produced by the computer was missing the data for the “ship-to” address.

7. At Tampa Bay, Inc., the finished goods warehouse delivers goods to the shipping department, accompanied by the picking ticket. Then the shipping department prepares a packing slip. A recent audit discovered that a dishonest warehouse employee had been forging picking ticket documents, allowing him to have goods shipped to an accomplice.

8. The job of Mark, a programmer at Tolland, Inc., included doing maintenance programming for the order entry application. Doreen altered the programs so that the credit-checking routine was bypassed for one of the customers, a company owned by her uncle.

9. After receiving goods from the warehouse, with attached picking ticket, shipping clerks at Golden Bowl Company key in the sales order number, item numbers, and quantities. The computer then records the picking ticket data and prints a packing slip. Customers have been complaining that the packing slip is not accurate as to items and quantities.

10. Clerks in the shipping department at Kaynick, Inc. scan picking tickets to retrieve the appropriate open sales order and then scan another bar code on the picking ticket to trigger the recording of the shipment. Then a packing slip is prepared, attached to the box, and the box is placed on the conveyer to the loading dock. They have discovered that some shipments are not being recorded by the system.

In recent years, the optimal management structure has shifted from a narrow span of control to a broad or wide span of control. Earlier, three to seven individuals were reporting to the same manager (narrow span), whereas today, it is common to have twenty or more staff members reporting to the same person (broad span), as stated in the course textbook. Based on the readings for this week, the South University Online Library, and the Internet, respond to the following discussion points:

Identify at least one pro and one con for each span of control described above.

State, with reasons, which of the two structures you would recommend.

1. Seven thieves try to share a hoard of gold bars equally between themselves. Unfortunately, six bars are left over, and in the fight over them, one thief is killed. The remaining six thieves, still unable to share (all) the bars equally since two are left over, again fight, and another is killed. When the remaining five share (all) the bars, one bar is left over, and it is only after yet another thief is killed that an equal sharing is possible. What is the minimum number of bars which allows this to happen? [Hint: Be carefully to check that the conditions for the Chinese Remainder Theorem apply before using it.]

amou Company makes filing cabinets of two varieties, applying overhead at the rate of $85 per machine hour. Total actual overhead for the year is $1,500,000. Production data are as follows: Unit A Unit B Direct Material Cost $40 $50 Direct Labor Cost $25 $40 Budgeted Units Produced 4,000 7,500 Mamou is considering changing its overhead application method to an activity based system. A study uncovers three overhead activities budgeted as follows: Manufacturing set ups (total cost $320,000); Machine costs (total cost $936,000); and Engineering costs (total cost $264,000). Data on appropriate budgeted drivers are shown below:

UnitA UnitB

Number of Setups

100 60

Machine Hours

8,000 10,000

Engineering Shifts (8 hrs)

120 100

a. Calculate the total cost to make one of each type of filing cabinet, including material, labor, and overhead, applying overhead using the single overhead cost driver of $85 per machine hour: UnitA ___________ UnitB ____________

b. Will overhead be over- or underapplied, and by how much, using this approach? Overapplied _____ Underapplied _____ Amount ___________

c. What will you do with the amount of overapplied or underapplied overhead? (Choose one of the following actions)

1. Do nothing-leave it in the cost of the goods in inventory. _________

2. Adjust the cost of goods sold or related inventory accounts. ________

3. Report it as a separate item on the income statement. __________

d. Calculate the total cost to make one of each type of filing cabinet, including material, labor, and overhead, applying overhead using activity based costing and the drivers indicated in the problem: UnitA ____________ UnitB ____________

On pages 7-7 and 7-8 (Sections 7-3a and 7-3b), the text explains what are casualty and theft losses that an individual may deduct, even though the losses are related to personal use property. The text gives examples of occurrences that cause losses that do not qualify as casualty losses, and states that misplacing items does not count as a “theft.” However, the IRS gives more detailed guidance on these issues.

• What occurrences do not result in deductible casualty losses according to the IRS in addition to those listed in the text?
• What occurrences do not result in deductible theft losses according to the IRS in addition to those listed in the text?
• At the same time it is explaining the occurrences that do not result in deductible casualty or theft losses, the IRS states that deductible losses can result from several specific occurrences that would seem to fall into the “nondeductible” category. Briefly describe these provisions.
• Please answer each question in complete sentences, and cite the name and number of the IRS publication or form/instruction where you found each answer, and the page number on which the answer is found.