Question

Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer...

Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer interns are subject to a 70 percent learning curve for one of its important tasks, proofreading financial statements. For one of its interns, Kim Down, the firm has started to analyze the relation between time and financial statement proofreading.

Financial Statements
Proofread (X)
Time Required to Proofread
the Xth Financial Statement
1 6.0000 hours
2 4.2000 hours
4 ?
8 ?
16 ?

Required:

a. Compute the time required to proofread 4, 8, and 16 financial statements. (Round your answers to 4 decimal places.)
TIME REQUIRED FOR THE 4TH FINANCIAL STATEMENT _______________ HRS
TIME REQUIRED FOR THE 8TH FINANCIAL STATEMENT _______________-HRS
TIME REQUIRED FOR THE 16TH FINANCIAL STATEMENT    ______________HRS

b. Assume that Kim's labor time costs $13 per hour. Compare the cost of proofreading the 1st financial statement to the cost of proofreading the 16th financial statement. What is the percentage of the cost of proofreading the 16th financial statement to the cost of proofreading the 1st financial statement? (Do not round your intermediate calculations. Enter your answer as a percentage rounded to 2 decimal places (i.e., 32.21))

PERCENTAGE OF PROOFREADING COST FOR THE 16TH FINANCIAL STATEMENT TO COST OF PROOFREADING 1ST FINANCIAL STATEMENT ___________%

Homework Answers

Answer #1

Solution:

a.)

Financial Statements Proofread(X) Time Required to Proofread the Xth Financial Statement
1 6.0000 hours
2 4.2000 hours 2.0000 hours * 0.70
4 2.9400 hours 4.2000 hours *0.70
8 2.0580 2.9400 hours * 0.70
16 1.4406 2.0580 hours * 0.70

b.)
Cost of proofreading the first report = $78 (=6.0 hours * $13 per hour)
Cost of proofreading the 16th report = $18.73 (=1.4406 hours * $13 per hour)
= 24.01% of the first unit cost (=$18.73 / $78)

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer...
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer interns are subject to a 70 percent learning curve for one of its important tasks, proofreading financial statements. For one of its interns, Kim Down, the firm has started to analyze the relation between time and financial statement proofreading. Financial Statements Proofread (X) Time Required to Proofread the Xth Financial Statement 1 8.0000 hours 2 5.6000 hours 4 ? 8 ? 16 ? Required:...
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer...
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer interns are subject to a 80 percent learning curve for one of its important tasks, proofreading financial statements. For one of its interns, Kim Down, the firm has started to analyze the relation between time and financial statement proofreading. Financial Statements Proofread (X) Time Required to Proofread the Xth Financial Statement 1 3.0000 hours 2 2.4000 hours 4 ? 8 ? 16 ? a....
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer...
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer interns are subject to a 90 percent learning curve for one of its important tasks, proofreading financial statements. For one of its interns, Kim Down, the firm has started to analyze the relation between time and financial statement proofreading. Financial Statements Proofread (X) Time Required to Proofread the Xth Financial Statement 1 9.0000 hours 2 8.1000 hours 4 ? 8 ? 16 ? Required:...
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer...
Assume that Whee, Cheatham, and Howe is an auditing firm that has found that its summer interns are subject to a 50 percent learning curve for one of its important tasks, proofreading financial statements. For one of its interns, Kim Down, the firm has started to analyze the relation between time and financial statement proofreading. Financial Statements Proofread (X) Time Required to Proofread the Xth Financial Statement 1 2.0000 hours 2 1.0000 hours 4 ? 8 ? 16 ? Required:...
The accounting records for Portland Products report the following manufacturing costs for the past year. Direct...
The accounting records for Portland Products report the following manufacturing costs for the past year. Direct materials $ 310,000 Direct labor 268,000 Variable overhead 233,000 Production was 180,000 units. Fixed manufacturing overhead was $793,000. For the coming year, costs are expected to increase as follows: direct materials costs by 20 percent, excluding any effect of volume changes; direct labor by 4 percent; and fixed manufacturing overhead by 10 percent. Variable manufacturing overhead per unit is expected to remain the same....
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:    Sales (13,400 units × $20 per unit) $ 268,000 Variable expenses 134,000 Contribution margin 134,000 Fixed expenses 149,000 Net operating loss $ (15,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:    Sales (13,200 units × $20 per unit) $ 264,000 Variable expenses 158,400 Contribution margin 105,600 Fixed expenses 117,600 Net operating loss $ (12,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:    Sales (13,400 units × $30 per unit) $ 402,000 Variable expenses 241,200 Contribution margin 160,800 Fixed expenses 178,800 Net operating loss $ (18,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:    Sales (13,300 units × $30 per unit) $ 399,000 Variable expenses 239,400 Contribution margin 159,600 Fixed expenses 177,600 Net operating loss $ (18,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been...
Due to erratic sales of its sole product—a high-capacity battery for laptop computers—PEM, Inc., has been experiencing financial difficulty for some time. The company’s contribution format income statement for the most recent month is given below:    Sales (12,700 units × $30 per unit) $ 381,000 Variable expenses 228,600 Contribution margin 152,400 Fixed expenses 170,400 Net operating loss $ (18,000 ) Required: 1. Compute the company’s CM ratio and its break-even point in unit sales and dollar sales. 2. The...