Question: 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

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. ?

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