core concepts of accounting information system

13.13-the Goochland Company manufactures various types of clothing products for women. To accumulate the costs of manufacturing these products, the company’s accountants have established a computerized cost accounting system. Every Monday morning, the prior week’s production cost data are batched together and processed. One of the outputs of this processing function is a production cost report for management focuses on the significant variances as the basis for analyzing production performance.

Errors sometimes occur in processing a week’s production cost of the reprocessing work on a week’s production cost data is estimated to average about $12,000. The company’s management is currently considering the addition of a data validation control procedure within its cost accounting system that is estimated to reduce the risk of the data errors from 16% to 2% and this procedure is projected to cost $800/week.

a.Using these data perform a cost benefit analysis of the data validation control procedure that management is considering for its cost accounting system.

 

     b. based on your analysis, make a recommendation to management to management regarding the data validation control procedure.

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Answer:

  • *********
    a
    ************
    analysis:
    ******* ******** Procedure
    ****
    ********
    **********
    *** *********
    Difference
    Cost
    **
    ***********
    **********
    **** data
    *******
    *******
    ****
    ** ****
    *******
    ****
    ***
    ************ cost expected ******* * ******
    *
    *****
    $
    ****
    $1680
    ****
    **
    ********** control ********* ************
    ******
    *
    *
    800
    **
    *****
    Net
    ********* ******* from ********** ******* **********
    *
    **** b...
    Attached: Core concepts of accounting information system.doc

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