Corral Corporation is experiencing errors with inventory tracking. Incorrect tracking causes errors in inventory balances and the
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Corral Corporation is experiencing errors with inventory tracking. Incorrect tracking causes errors in inventory balances and the financial statements. To make corrections cost the company $350,000 in labor and processing. Adding an improved cost center system for an amount of $50,000, would reduce the likelihood down by 40% from the current likelihood of 60%. Answer following results of cost/benefit analysis.
1. What is difference in expected loss without procedure and with procedure?
2. What is net expected benefit for cost/benefit analysis?
3. Should you reduce the likelihood by implementing procedure, or accept likelihood of loss? Enter one word, reduce or accept. ?
Related Book For
Using Financial Accounting Information The Alternative to Debits and Credits
ISBN: 978-1133161646
7th Edition
Authors: Gary A. Porter, Curtis L. Norton
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