An accounting firm has 780 hours of staff time and 272 hours of reviewing time available each week. The firm charges $1500 for an audit and $200for a tax return. Each audit requires 60 hours of staff time and 16 hours of review time. Each tax return requires 10 hours of staff time and 4 hoursof review time. What numbers of audits and tax returns will yield an optimal revenue?auditstax returnsWhat is..the..optimal revenue?x|Submit Answer

The objective of the question is to find the optimal number of audits and tax returns that the…

Answered: An accounting firm has 780 hours of…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter14: Partnerships And Limited Liability Entities

Section: Chapter Questions

Problem 6RP

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An accounting firm has 780 hours of staff time and 272 hours of reviewing time available each week. The firm charges $1900 for an audit and $270 for a tax return. Each audit requires 60 hours of staff time and 16 hours of review time. Each tax return requires 10 hours of staff time and 4 hours of review time. What numbers of audits and tax returns will yield an optimal revenue? audits tax returns What is the optimal revenue?
Calculate materiality for the client, assuming that it is a profit-oriented company and moderate audit risk. Explain why you chose the base you did and why you chose the percentage. You may use guidelines from the textbook or the case study and should refer to the specific guidelines you used in your answer. Current Year Prior Year Sales/revenue (net) 30,381,954 26,290,518 Expenses 7,263,786 6,519,376 Gross Margin 8,378,660 7,280,887 Pre-tax Income 1,114,873 761,510 Current Assets 18,993,546 16,966,273 Current Liabilities 8,221,991 6,810,164 Total Assets 19,679,541 17,670,625
Your senior auditor approved the planning materiality you just established. You are now preparing to establish your performance materiality for accounts payable and revenue. Your senior auditor tells you that the materiality judgement for accounts payable is 50%, and the materiality judgement for revenue is 65%. What is the performance materiality for accounts payable and revenue? Show your work. Your work should show: APPROPRIATE AMOUNT x AP MATERIALITY JUDGEMENT = AP PERFORMANCE MATERIALITY APPROPRIATE AMOUNT x REVENUE MATERIALITY JUDGEMENT = REVENUE PERFORMANCE MATERIALITY
The desire to maximize profits can work against racial and other types of discrimination. To see why, consider two equally productive accountants named Ted and Jared. Ted is black, and Jared is white. Both can complete 10 audits per month. Instructions: Enter your answers as a whole number. In part b, round your answer for profit rate to 1 decimal place. a. Suppose that for any accounting firm that hires either Ted or Jared, all the other costs of performing an audit (besides paying either Ted or Jared) come to $1,000 per audit. If the going rate that must be paid to hire an accountant is $7,000 per month, how much will it cost an accounting firm to produce one audit if it hires either Ted or Jared to do the work? $1,700 b. If the market price that accounting firms charge their clients for an audit is $1,800, what would the accounting profit per audit be for a firm that hired either Ted or Jared? $ 100 What is the profit rate as a percentage? 5.88 percent c. Suppose that firm A…
Compute: 1. The minimum required return by Cross-Ocean’s preferred shareholders 2. The overall minimum required return for Cross-Ocean’s stakeholders
Elitz and Van Aken, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending December 31, 2020: Service Billable Hours Audit Department: Staff 22,400 Partners 7,900 Tax Department: Staff 13,200 Partners 5,500 Small Business Accounting Department: Staff 3,000 Partners 600 The average billing rate for staff is $160 per hour, and the average billing rate for partners is $350 per hour. Prepare a professional fees earned budget for Elitz and Van Aken, CPAs, for the year ending December 31, 2020, using the following column headings and showing the estimated professional fees by type of service rendered and add additional rows in the table as needed:
You are an audit supervisor of PricewaterhouseCoopers (PwC) and are planning the audit of your client, Blister Pharmaceuticals co. which manufactures and imports sanitary and cleaning products (gloves, sanitizers, etc). Its year end was 31 July 2020 and the draft profit before tax is Rs 33.6 million. You are supervising a large audit team for the first time and will have specific responsibility for supervising and reviewing the work of the audit assistants in your team.Blister Pharmaceuticals Co purchases most of its raw materials from suppliers in Africa and these goods are shipped directly to the company's warehouse and the goods are usually in transit for up to three weeks. Due to the COVID-19 Pandemic, the company has incurred Rs 1.3 million of expenditure on developing a new range of cleaning products used for dis-infection purposes which are due to be launched into the market place in November 2020. In September 2019, Blister Pharmaceuticals co. also invested Rs 0.9 million in a…
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer interns are subject to a 90 percent learning curve for one of its important tasks, proofreading financial statements. For one of its interns, Kim Down, the firm has started to analyze the relation between time and financial statement proofreading. Financial StatementsProofread (X) Time Required to Proofreadthe Xth Financial Statement 1 2.0 hours 2 1.8 hours 4 ? 8 ? 16 ? Required: a. Compute the time required to proofread 4, 8, and 16 financial statements.
Your Task… Using your assigned financial statements calculate the required ratios below Indicate if the change from year to year is favorable or unfavorable. All values should be accurate to at least two decimal places. The expectation is to submit a professional report free of grammar and spelling errors and easy to read. Think of this as a menu you would be handing to a customer. All calculations are to be represented. Analysis of Profitability Gross Profit Ratio Operating Profit Ratio Net Profit Ratio Sales to Total Assets Ratio Return on Total Assets Return on Equity Earnings Per Share
Brookbury Accounting completed 150 tax returns in the month of March. Its Effective Capacity is 170 tax returns and its Design Capacity is 175 tax returns. Calculate the Efficiency and Utilization for Brookbury Accounting. What do these two numbers tell you?
Financial information for BDS Enterprises for the year-ended December 31, 20xx, was gathered from an accounting intern, who has asked for your guidance on how to prepare an income statement format that will be distributed to management. Subtotals and totals are included in the information, but you will need to calculate the values. A. In the correct format, prepare the income statement using the following information: B. Calculate the profit margin, return on investment, and residual income. Assume an investment base of $100,000 and 6% cost of capital. C. Prepare a short response to accompany the income statement that explains why uncontrollable costs are included in the income statement.

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