Activity-Based Costing and Other Cost Management Tools. Fraud Case 18-1Fraud Case 18-1Anu Ghai was a new production analyst at RHI, Inc., a large furniture factory in North Carolina. One of her first jobs was to update the activity rates for factory production costs. This was normally done once a year, by analyzing the previous year's actual data, factoring in projected changes, and calculating a new rate for the coming year. What Anu found was strange. The activity rate for “maintenance” had more than doubled in one year, and she was puzzled how that could have happened. When she spoke with Larry McAfee, the factory manager, she was told to spread the increases out over the other activity costs to “smooth out” the trends. She was a bit intimidated by Larry, an imposing and aggressive man, but she knew something wasn’t quite right. Then one night she was at a restaurant and overheard a few employees who worked at RHI talking. They were joking about the work they had done fixing up Larry's home at the lake last year. Suddenly everything made sense. Larry had been using factory labor, tools, and supplies to have his lake house renovated on the weekends. Anu had a distinct feeling that if she went up against Larry on this issue, she would come out the loser. She decided to look for work elsewhere.Requirements1. Besides spotting irregularities, like the case above, what are some other ways that ABC cost data are useful for manufacturing companies?2. What are some of the other options that Anu might have considered?Please upgrade my response DANIELLE CPA1. Besides spotting irregularities, like the case above, what are some other ways that ABC cost data are useful for manufacturing companies? ABC data can be used to highlight areas where costs are out of control, where cost savings should be considered, or more efficient operations should be looked into. They also can be used for budgeting, analyzing profitability of various products, and for pricing decisions.2. What are some of the other options that Anu might have considered? If a company has an audit committee, an employee can usually contact them anonymously. If, however, upper management is in on the scheme, the employee is in a very weak position, and should consider, like the case above, getting out. Alternatively, an employee could tip off either the outside auditors, or law enforcement.ReferenceHorngren, C.T., Harrison W.T., & Oliver, M.S. (2012). Accounting (9th ed.). Upper Saddle River, NJ: Pearson Prentice Hall
Thanks for requesting me!Do you need a certain number of words?DanielleCPA41089.0480402778
IN THE RANGE I PROJECTED WITH MY RESPONSE .
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THANK YOU DANIELLECPA.
Here you go:
1) Data from activity-based costing can be useful in a number of ways. Because ABC offers a more accurate method of costing, it can be a useful tool to better understand costs, including identifying areas for cost savings and areas where costs have spun out of control. Because ABC data correlates more specifically with specific product lines, it is beneficial for identifying potential areas for improvement and potential efficiencies. ABC cost data is useful in management decisions and analysis, such as budgeting, product profitability analysis, and pricing decisions.
2) Anu may have considered reporting Larry’s actions to upper management. If the company has an audit committee, Anu may have considered contacting them anonymously. Depending on the size of the company, it may also have a dedicated ethical or fraud hotline that Anu could have considered contacting. Alternatively, Anu may have considered contacting the firm’s external auditors or law enforcement. If, however, upper management is in on the fraud, the employee’s best course of action is often to separate themselves from the situation and resign.
CPA with finance and business expertise
Hi Danielle CPA,
Hi, I have been offline most of the day. I am here now and available the rest of the night. I do not see the quiz posted. Could you please post it?Thanks!
Hi Jaida,Please download your answers from the link below.https://www.box.com/s/03d366490662bcde3bb7Thanks!
DanielleCPA I want to give you a bonus of $25.00 but I am not getting that option to pay?
Is it not allowing you to give my answer a "positive rating?" You should be able to do that through the thread.If not, please post another new and leave this question open. I will post an answer and then you could rate that answer and give bonus. Thank you.
It is allowing me to give a positive rating but it is asking me to authorize a payment of $50.00. Presently I am unemployed and I am willing to give a bonus of $25.00. So what do I do DANIELLECPA ?
Ok, I misunderstood your original question. It is going to ask you for the $50 since that was the value of the first question on this thread. please post another question for $25 if that is what you are willing to pay. I will answer it, and then you can give a positive rating. Do not give a rating on this question.
Just be to sure to type "FOR DANIELLECPA" in the question.Sorry for this inconvenience. I just don't want you to overpay.
"FOR DANIELLECPA"FINANCE QUESTION
1. The Master Budget and Responsibility Accounting
From Chapter 22, Ethical Issue 22-1. 2. Residence Suites operates a regional hotel chain. Each hotel is operated by a manager and an assistant manager/controller. Many of the staff who run the front desk, clean the rooms, and prepare the breakfast buffet work part time or have a second job so turnover is high. Assistant manager/controller Terry Dunn asked the new bookkeeper to help prepare the hotel’s master budget. The master budget is prepared once a year and is submitted to company headquarters for approval. Once approved the master budget is used to evaluate the hotel’s performance. These performance evaluations affect hotel manager’s bonuses and they also affect company decisions on which hotels deserve extra funds for capital improvements. When the budget was almost complete, Dunn asked the bookkeeper to increase amounts budgeted for labor and supplies by 15%. When asked why, Dunn responded that hotel manager Clay Murry told her to do this when she began working at the hotel. Murry explained that this budgetary cushion gave him flexibility in running the hotel. For example, because company headquarter tightly controls capital improvement funds, Murry can use the extra money budgeted for labor and supplies to replace broken televisions or pay “bonuses” to keep valued employees. Dunn initially accepted this explanation because she had observed similar behavior at the hotel where she worked previously.
Requirements:Put yourself in Dunn’s position. In deciding how to deal with the situation, answer the following questions:1. What is the ethical issue?2. What are my options?3. What are the possible consequences?4. What should I do?
THERE ARE THREE ONLINE TUTORS BLOCKING MY POST FOR YOU. WHY?
I don't know why it's blocking. Just repost this second question - even if you don't "request" me using the website, just type in "For DanielleCPA" at the beginning of the post and another expert will know not to answer it. Thanks!
You're welcome. I'm sorry you have been experiencing so much difficulty with the site. I appreciate you trying so hard to request me.