The call center of Wobegon Electric Company handles 1.2 million calls per year. The average call requires six minutes of operator time and 40 percent of the calls require a supervisor to be involved for at least half of the call time. Operators are paid $9 per hour and supervisors are paid $15 per hour. After Wobegon Electric engaged in process benchmarking, call times were reduced by one minute and the number of supervisor-involved calls were reduced by 15 percent. The benchmarking study cost Wobegon Electric Company $200,000. a. What was Wobegon Electric’s total labor cost and labor cost per call at the call center prior to benchmarking? b. What was Wobegon Electric’s total labor cost and labor cost per call at the call center after benchmarking? (Round up to the nearest penny.) c. If the new results are expected to continue for three years, was engaging in the benchmarking study profitable to Wobegon Electric Company? Show calculations.
> Auditing an AIS effectively requires that an auditor have some knowledge of computers and their accounting applications. However, it may not be feasible for every auditor to be a computer expert. Discuss the extent to which auditors should possess comput
> Should organizations permit personal use of e-mail systems by employees during working hours?
> What risks, if any, does offshore outsourcing of various information systems functions pose to satisfying the principles of confidentiality and privacy?
> What is the relationship between COSO, COBIT, and the AICPA’s Trust Services frameworks?
> Explain what an event is. Using the Internet as a resource, create a list of some of the many internal and external factors that COSO indicated could influence events and affect a company’s ability to implement its strategy and achieve its objectives.
> Some restaurants use customer checks with prenumbered sequence codes. Each food server uses these checks to write up customer orders. Food servers are told not to destroy any customer checks; if a mistake is made, they are to void that check and write a
> When you go to a movie theater, you buy a prenumbered ticket from the cashier. This ticket is handed to another person at the entrance to the movie. What kinds of irregularities is the theater trying to prevent? What controls is it using to prevent these
> For each of the following independent cases of employee fraud, recommend how to prevent similar problems in the future. a. Due to abnormal inventory shrinkage in the audiovisual department at a retail chain store, internal auditors conducted an in-depth
> Answer the following questions about the audit of Springer’s Lumber & Supply a. What deficiencies existed in the internal environment at Springer’s? b. Do you agree with the decision to settle with the Springers rather than to prosecute them for fraud
> Contrast the logical and the physical view of data and discuss why separate views are necessary in database applications. Describe which perspective is most useful for each of the following employees: a programmer, a manager, and an internal auditor. Ho
> Your classmate asks you to explain flowcharting conventions using real-world examples. Draw each of the major flowchart symbols from memory, placing them into one of four categories: input/output, processing, storage, and flow and miscellaneous. For each
> Information technology enables organizations to easily collect large amounts of information about employees. Discuss the following issues: a. To what extent should management monitor employees’ e-mail? b. To what extent should management monitor which
> Compare the guidelines for preparing flowcharts and DFDs. What general design principles and limitations are common to both documentation techniques?
> You were asked to investigate extremely high, unexplained merchandise shortages at a department store chain. Classify each of the five situations as a fraudulent act, an indicator of fraud, or an event unrelated to the investigation. Justify your answers
> a. List the procedures or the internal documents that are labeled letters c to r in the flowchart of Bottom Manufacturing Corporation’s charge sales system. Organize your answer as follows (Note that the explanations of the letters a and b in the flowcha
> You recognize weaknesses in the existing system and believe a document flowchart would be beneficial in evaluating this client’s internal control in preparing for your examination of the financial statements. a. Complete the flowchart given in Figure 3-
> Retrieve the S&S In-Chapter Database (in Microsoft Access format) from the text’s Web site (or create the tables in Table 4-5 in a relational DBMS product). Write queries to answer the following questions. Note: For some questions, you may have to create
> Ashton wants to store the following data about S&S’s purchases of inventory: item number …………………………………. date of purchase vendor number ……………………………… vendor address vendor name …………………………………
> Citizen’s Gas Company (CGC) provides natural gas service to 200,000 customers. The customer base is divided into the following three revenue classes: Residential customer gas usage is highly correlated with the weather. Commercial customer usage is parti
> Most DBMS packages contain data definition, data manipulation, and data query languages. For each of the following, indicate which language would be used and why. a. database administrator defines the logical structure of the database b. The controller
> Match the following terms with their definitions TERM DEFINITION a. data processing 1. Contains summary-level data for every asset, liability, equity, revenue, and expense account b. source documents 2. Items are numbered consecutively to
> Which of the following actions update a master file and which would be stored as a record in a transaction file? a. Update customer address change b. Update unit pricing information c. Record daily sales d. Record payroll checks e. Change employee p
> Your nursery sells various types and sizes of trees, bedding plants, vegetable plants, and shrubs. It also sells fertilizer and potting soil. Design a coding scheme for your nursery.
> Classify each of the following items as belonging in the revenue, expenditure, human resources/payroll, production, or financing cycle. a. Purchase raw materials b. Pay off mortgage on factory c. Hire a new assistant controller d. Establish a $10,000
> Have you ever imagined having one electronic device that does everything you would ever need? Mobile phone makers in Japan have gone beyond the imagining phase. Cell phones in Japan are becoming more versatile than ever. Newer models of cell phones conta
> The chart of accounts must be tailored to an organization’s specific needs. Discuss how the chart of accounts for the following organizations would differ from the one presented for S&S in Table 2-2.
> A new program at Jones and Carter Corporation (JCC) was supposed to track customer calls. Unfortunately, the program took 20 minutes to load on a PC, and it crashed frequently. The project did not have a traditional reporting structure, and it appeared t
> MetLife, an insurance company, spent $11 billion to acquire Travelers Life and Annuity from Citicorp in one of the largest insurance company acquisitions of all time. The Metlife CIO estimated it would take three years to integrate the two systems. Becau
> Audio Visual Corporation (AVC) manufactures and sells visual display equipment. Headquartered in Boston, it has seven sales offices with nearby warehouses that carry its inventory of new equipment and replacement parts. AVC has a departmentalized manufac
> A credit union is developing a new AIS. The internal auditors suggest planning the systems development process in accordance with the SDLC concept. The following nine items are identified as major systems development activities that will have to be compl
> Ryon Pulsipher, manager of Columbia’s property accounting division, has had difficulty responding to the following departmental requests for information about fixed assets. 1. The controller has requested individual fixed assets schedules to support the
> Mickie Louderman is the new assistant controller of Pickens Publishers. She was the controller of a company in a similar industry, where she was in charge of accounting and had considerable influence over computer center operations. Pickens wants to reva
> Wang Lab’s tremendous growth left the company with a serious problem. Customers would often wait months for Wang to fill orders and process invoices. Repeated attempts by Wang’s understaffed IS department to solve these problems met with failure. Finally
> You were hired to manage the accounting and control functions at the Glass Jewelry Company. During your introductory meeting, the president asked you to design and implement a new AIS within six months. Company sales for the past year were $10 million, a
> Norcom, a division of a large manufacturer, needed a new distribution and customer service system. The project was estimated to take 18 months and cost $5 million. The project team consisted of 20 business and IT staff members. After two years, the CIO
> Meredith Corporation publishes books and magazines, owns and operates television stations, and has a real estate marketing and franchising service. Meredith has 11 different systems that do not communicate with each other. Management wants an executive i
> A large organization had 18 months to replace its old customer information system with a new one that could differentiate among customer levels and provide appropriate products and services on demand. The new system, which cost $1 million and was install
> Nielsen Marketing Research (NMR), with operations in 29 countries, produces and disseminates marketing information. Nielsen has been the primary supplier of decision support information for more than 70 years. NMR’s most recognizable product is the Niels
> Mark Mitton, the liaison to the IS department, has eliminated all but the best three systems. Mark developed a list of required features, carefully reviewed each system, talked to other users, and interviewed appropriate systems representatives. Mark use
> This case involves creating a database from an integrated REA diagram and then using the REA diagram to guide the writing of queries to prepare financial statements. Required a. Create the tables necessary to implement Figure 19-9 in a relational datab
> The Web site for this book contains an adaption of Russell L. Ackoff’s classic article “Management Misinformation Systems” from Management Science. In the article, Ackoff identified five common assumptions about information systems and then explained wh
> UpTown Mfg. custom manufactures machine parts used by other companies. The following data relate to production of Part #33: Annual quantity produced in units ………………………….3,600 Cost
> Compute annual estimated demand for a product if the economic order quantity is 1,600 units, carrying cost is $0.35 per unit, and ordering cost is $140.00 per order.
> Determine the carrying costs for an item costing $6.80, given the following per-unit cost information: Storage cost …………………………………………$0.24
> Farm Fresh manufactures a variety of animal food products from alfalfa “pellets.” The firm has determined that its EOQ is 80,000 pounds of pellets. Based on the EOQ, the firm’s annual ordering cost for pellets is $16,700. Given this i
> Diane Delbert operates a health food bakery that uses a special type of ground flour in one of its high-margin products. The bakery operates 365 days a year. Delbert finds that she seems to order either too much or too little special flour and asks for
> What are the three costs associated with inventory? Explain each and give examples.
> Rocky Natore, owner of Rocky’s Pizza, has a policy to put 36 slices of pepperoni on a large pizza. Natore recently hired two college students to work part-time making pizzas and decided to observe them at their jobs for a few days. Natore gathered the fo
> According to the 2008 J.D. Power and Associates Reports, Porsche models have the fewest quality problems in the industry, with just 87 problems per 100 vehicles. Infiniti and Lexus products follow with 98 and 99 problems per 100 vehicles. Source: J.D. Po
> Mark each of the following statements as true or false and explain why the false statements are incorrect. a. Results benchmarking relies only on comparisons to firms within the same industry. b. SPC control charts are used to plot the costs of quality o
> Rogal and Associates Legal Services hires full- and part time professional employees. Full-time experienced staff can be hired for a salary of $60,000 per year; fringe benefit costs for each full-time employee amount to 20 percent of base salary. Rogal a
> Sometimes a company, in its efforts to reduce costs, might also reduce quality. a. What kinds of costs could an organization reduce that would almost automatically lower product/service quality? b. If quality improvements create cost reductions, why woul
> Forsythe Furniture has gathered the following data on its quality costs for 2009 and 2010: a. Compute the percentage change in the two quality cost categories from 2009 to 2010. b. Write a brief explanation for the pattern of change in the two categorie
> The accounting system for Amaldi Co. reflected the following quality costs for 2009 and 2010: a. Which of these are costs of compliance, and which are costs of noncompliance? b. Calculate the percentage change in each cost and for each category. c. Disc
> Seymour Inc. has prepared the following summary quality cost report for 2010: Prevention costs …………………………………..$1,560,000 Appraisal costs ………………………………………1,800,000 Internal failure costs ……………………………..2,280,000 External failure costs ……………………………..1,680,000
> Hartigay Manufacturing is evaluating its quality control costs for 2010 and preparing the budget for 2011. Quality costs incurred at the company for 2010 are as follows: Prevention costs ………………………………………$ 450,000 Appraisal costs …………………………………………….150,000
> Koss Corp. makes high-quality headphones for a variety of applications. Koss is a Milwaukee-based company but has significant manufacturing operations in China. When manufacturing operations were moved to China, CEO Michael Koss was a strong proponent of
> For a benchmark, assume that the average firm incurs quality costs in the following proportions: Prevention ……………………………………..25% Appraisal ……………………………………….25% Internal failure ……………………………..25% External failure ……………………………..25% Total costs …………………………………..1
> Find The Benchmarking Exchange on the Internet. a. What are the five most actively benchmarked business processes of members of the exchange? b. Why do you think benchmarking processes related to managing human resources rank highly on the benchmarking i
> Your company is interested in developing information about quality but has a traditional accounting system that does not provide such information directly. In a three- or four-person team, prepare a set of recommendations about how to improve the company
> The following production information about quality costs has been gathered for June 2010: Total defective units ……………………………………………..580 Number of units reworked ……………………………………380 Number of units returned …………………………………….100 Total prevention cost …………………………
> Use the Internet to find four definitions of quality. a. Compare and contrast each of the four definitions with specific emphasis on whether the definition includes conformity or customer orientation. b. Assume that you are the manager of (1) a copy stor
> Idaho Industrial is a medium-size manufacturing corporation in a capital-intensive industry. Currently, actual profits are not meeting expectations. As a result, investment funds are limited and hiring is restricted. These consequences of the corporation
> By building quality into a process rather than having quality inspections at the end of the process, certain job functions (such as that of quality control inspector) can be eliminated. Additionally, the installation of automated equipment to monitor pro
> Johnson Consumer Electronics operates in an industry in which the demand for products is cyclical and often unpredictable. Discuss a strategy for dealing with uncertainty associated with the cycles that would be appropriate for Johnson Consumer Electroni
> Assume that you are in the market for a new car. Since your promotion at work, price is no object. You are considering purchasing a Porsche, but your spouse has suggested the purchase of a Kia. a. What do you perceive to be Porsche’s strategy relative to
> What is a quality audit? Most large companies view their markets on an international rather than a domestic basis. To compete effectively in a global environment, companies must recognize the need for, and be willing to initiate, compliance with a variet
> Assume that you are a management consultant who advises manufacturing firms regarding production technologies. One of the hot issues you often discuss with management is whether a pull system or a push system is superior in a particular situation. Consid
> Omaha Metal Products manufactures a variety of industrial products from stock metal components. The firm is engaged in its annual process of budgeting costs and revenues for the coming year. The cost of metal consumes approximately 50 percent of total re
> How can Pareto analysis help focus managerial efforts on reducing the costs of quality related problems?
> How is technology affecting supply-chain purchasing practices and transaction costs?
> In 2002, a green engineering case study about automobile emissions and saving energy was performed. The study generated designs for both gasoline- and diesel-powered automobiles with the following characteristics: a mid-size sedan that would get 52 miles
> What types of discretionary costs are subject to control as engineered costs? Provide several examples.
> Choose one product and one service with which you are well acquainted. Indicate how the product and service each meet (or do not meet) the eight overall quality characteristics. For the service, indicate how it meets (or does not meet) the three addition
> Go to the Web site for the Malcolm Baldrige National Quality Award and find the questionnaire titled “Are We Making Progress?”. a. Download the questionnaire and answer the questions relative to your place of employment or university. Ask four of your co
> Business process reengineering and downsizing often occur together. Why?
> In conducting activity analyses, the presence of certain activities indicates low production process quality. List five of these activities.
> How does the cost control system interact with the overall cost management system?
> Tyler Tubing’s management has been evaluating company policies with respect to control of costs of corrugated metal, one of the firm’s major component materials. The firm’s controller has gathered the following financial data, which may be pertinent to c
> How does the implementation of open-book management require an organization’s accountants to change their traditional practices?
> You have been assigned the task of projecting the cost of 2011 employee fringe benefits for your firm and have identified number of employees, total labor hours, and total labor cost as candidate independent variables for use in the estimation equation.
> Open-book management is a relatively new philosophy about the use of information in organizations. Describe open-book management and how it differs philosophically from the traditional view of the management of financial information in an organization
> New strategic alliances are formed every day. What are they, and why are they increasingly being used by businesses?
> What is an enterprise resource planning (ERP) system? How do ERP systems improve on prior generations of information systems?
> Besides increasing globalization, what trends within the United States are causing firms to seek more diversified workforces?
> How has the globalization of firms affected the diversity of their employees? Why has increased diversity put an additional burden on accounting systems?
> Describe “downsizing,” its causes, and its primary risks.
> Describe the three generic strategies for dealing with the environmental effects of operations. Is one of the strategies always preferred to the others? Discuss.
> What is business process reengineering? Does it lead to radical or modest changes in business practices? Discuss.
> IMeg manufactures various electronic assemblies that are sold primarily to computer manufacturers. IMeg’s reputation has been built on quality, timely delivery, and products that are consistently on the cutting edge of technology. IMeg’s typical product
> How would switching from a traditional manufacturing system to a flexible manufacturing system affect a firm’s inventory and production control systems?
> What changes must occur in a production environment to effectively implement JIT? Why are these changes necessary?
> You are employed by a firm engaging in heavy manufacturing. Its direct materials are sourced globally, but its non operating inputs are sourced from a variety of U.S. vendors. You have been charged with making a presentation to the CFO about the benefits
> What are the primary goals of the JIT philosophy, and how does JIT attempt to achieve these goals?
> What is kaizen costing, and how does it differ from target costing?
> Why does the development stage have such a significant influence on a product’s profitability over its life cycle?
> What is target costing, and how is it useful in assessing a product’s total life cycle cost?
> How does a product’s life cycle stage influence production cost management?
> Differentiate between the push and pull systems of production. Is JIT a push or a pull system?
> What is Pareto inventory analysis? Why do A items and C items warrant different inventory control methods? What are some methods that can be employed to control C items? Companies making purchasing (rather than production) decisions often compute the eco
