You are employed by Casey & Co. a firm of Certified Public Accountants based in Wexford. The firm has recently been engaged by a small manufacturing company to provide advice and recommendations to improve the company's costing system, The managing director of the manufacturing company is particularly interested in implementing standard costing. REQUIREMENT: Draft a memorandum for your client that (a) Outlines the purposes of standard costing: (b) Deseribes howa standard costing system operates. (e) Outlines FOUR factors that influence a company's demand for management EV(2 marks) EV (4 marks) accounting information. CR(4 marks) i) The following are Balance Sheet and income Statement of Om Itd. Liabilities 1.1.06 31.12.06 Assets 1.1.06 31.12.06 Share capital 180,000 2,22,000 Fixed Assets: Profit & loss A/e 75,900 81,900 Land 24,000 48,000 Creditors 120,000 1,17,000 Building 180,000 288,000 Current Assets: Outstanding Expenses 12,000 24,000 Cash 30,000 36,000 Provision for tax 6,000 6,600 Debtors 84,000 93,000 66.000 Stock Prov. for Dep. on building Information: Company sold building during the year, cost price of which was 132.000 48.000 453,900 517,500 60.000 453,900 517,500 Ghc36,000. Profit and Loss A/C For vear ended 31.3.06 Particular To Cost of sales RS Particular By Net sales RS 990,000 1,260,000 To Wages & salaries 120,000 To Gross profit c/d 150,000 1,260,000 1.260,000 40,000 150,000 To Operating Exp. To 30,000 Depreciation By Gross profit 6,000 To Provision for tax 156,000 156,000 36,000 By Profit on sale of 75,900 To Net profit Building 81,900 42,000 To proposed Dividend, REQUIRED 117,900 117,900 You are required to prepare a cash flow statement using a. Direct method b. Indirect method c. Distinguish between the direct and indirect methods CR(4 marks) CR(4 marks) CR(2 marks) (Total: 20 Marks]