Make at least three (3) specific recommendations to the management of D Corporation that would improve its accounting and financial reporting system Bell DivisionPerformance Report for the Year Ended December 31, 2020Increase/(Decrease) from 2019% CHANGE20202019AMOUNTSummary DataNet Income ($000 omitted)Return on Investment (ROI)Kits sold (units)$34,222$31,573$2,6498.4(6%)(14.0)(4.8)37%43%2,0002,100(100)Production DataKits started2,4001,60080050.0Kits transferred to Cornish Div.2,0002,100(100)(4.8)Kits in process at year-end700300400133.3Increase (Decrease) in kits in(500)process at year-endFinancial Data ($000)400Sales$138,000$162,800($24,800)(15.2)©The University of the West IndiesCourse Code: ACCT 3039211.../page 3Production costs of units sold40,000(8,000)(11,300)(8,000)($27,300)(20.0)(21.3)(21.6)(21.0)Raw material32,000Labor41,70053,000Factory overhead29,00037,000Cost of units sold$102,700$130,000Other Costs: Corporate Charges forPersonnel services228210188.6Accounting servicesFinancing costs(15)(225($222)425(3.4)(42.9)(18.9)440300525Total other costs$953$1,175Adjustments to IncomeUnreimbursed fire loss52(52)(100.0)Raw material losses due to125125impropoer storageTotal adjustments$125$52$73(100.0)(20.9)Total Costs$103,778$131,227($27,449)DIVISION INCOME$34,222$31,573$2,6498.4Division Investment$92,000$73,000$19,00026.0ROI37%43%(6%)(14.0) D Corporation is one of the major producers of pre-fabricated houses in the home buildingindustry. The corporation consists of two divisions:1. Bell Division, which acquires the raw materials to manufacture the basic house componentsand assembles them into kits.2. Cornish Division, which takes the kits and constructs the homes for final home buyers.The corporation is decentralized and the management of each division is measured by its income andreturn on investment.Bell Division assembles seven separate house kits using raw materials purchased at theprevailing market prices. The seven kits are sold to Cornish for prices ranging from US$45,000 toUS$98,000. The prices are set by corporate management of D Corporation using prices paid by Cornishwhen it buys comparable units from outside sources. The smaller kits with the lower prices havebecome a larger portion of the units sold because the final house buyer is face with prices that areincreasing more rapidly than personal income. The kits are manufactured and assembled in a new plantpurchased by Bell this year. The division had been located in a leased plant for the past fouryears.All kits are assembled upon receipt of an order from the Cornish Division. When the kit iscompletely assembled it is immediately taken by the Cornish Division for final construction. Thus, BellDivision has no finished goods inventory.The Bell Division's accounts and reports are prepared on an actual-cost basis. There is no budgetand standards have not been developed for each product. A factory overhead rate is calculated at thebeginning of each year. The rate is designed to charge all overhead to the product each year. Any under-or over- applied overhead is allocated to the cost of goods sold account and the WIP inventories.Bell Division's annual report is presented below. This report forms the basis of the evaluation ofthe division and its management by the corporation management.Additional information regarding corporate and division practices is as follows:The corporation office does all the personnel and accounting work for each division.The corporate personnel costs are allocated on the basis of number of employees in thedivision.The accounting costs are allocated to the division on the basis of total costs excludingcorporate charges.The division administration costs are included in factory overhead.The finance charges include a corporate-imputed interest charge on division assets anddivisional lease payments.anyThe division investment for the ROI calculation includes division inventory and plant andequipment at gross book value.

Decentralization refers to the system in which, control of operations and decision-making powers are…

Answered: Make at least three (3) specific…

Make at least three (3) specific recommendations to the management of D Corporation that would improve its accounting and financial reporting system

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

14. Opinions on the effectiveness of the internal control system and the fairness of the amounts reported in the financial statements are defined as: Select one: a. Management Assessments b. Assurance Opinions. c. Notes to the Financial Statements d. Management Discussion and Analysis.
How do you distinguish between Financial Reporting for GAAP, and full Disclosure. What is Management Discussion and Analysis. Access a public company annual report and analyze its MD&A section and how it helps the investors in their decision making process.
What does the conceptual framework intend to establish? a. the objectives and cocepts foruse in developing IFRSs b. the hierarchy of sources of accounting standards and principles c. the true concept of "present fairly in accordance with IFRSs' d. IFRS
The financial accounting Standards board is responsible for
Those charged with governance have a responsibility to ensure the information in financial report is: Select one: O a. True and fair. O b. Relevant and reliable. O c. Comparable and understandable. Od. All of the above. Clear my choice
Describe the organization of public accounting firms and identify the variousservices that they offer.
Which of the following organizations is responsible for the creation and governance of accounting standards in the United States? O A. Securities and Exchange Commission B. Financial Accounting Standards Board C. Institute of Management Accountants D. American Institute of Certified Public Accountants
125) Which of the following is an internal financial control? A) Budgeting b) Goal setting c) An audit conducted by KPMG d) A and B e) A and B and C
What are the two extreme approaches that a company might follow in determining appropriate accounting policies for preparing its initial set of IFRS financial statements?
a) The IASB's Conceptual Framework for Financial Reporting lays out the objectives and fundamentals that will guide the development of financial accounting and reporting standards. The purpose of financial reporting is defined by its objectives. The characteristics or qualities of information discussed in the Conceptual Framework are the concepts that make information useful and the qualities to be sought when accounting choices are made. Required i. Explain the benefits that the firms derived from the Conceptual Framework in preparing their financial statements. ii. Explain the most essential quality for accounting information as stated in the Conceptuai Framework? Justify your answer with an example.
Asap Impact of the Financial Accounting Standard Board
Statements of Financial Accounting Concepts issued by the FASBa. Represent GAAP.b. Have been superseded by SFASs.c. Are subject to approval of the SEC.d. Identify the conceptual framework within which accounting standards are developed.