11th commerce study material

Assume you were just assigned as lead auditor for a newe-commerce client. This is your client’s first year in business.Identify general business strategies that might explain yourclient’s decision to enter the e-commerce space with the likes ofgiants such as Amazon. Considering these strategies, identifypotential business risks that can lead to material misstatements inyour client’s financial statements. Be sure to include new start-upand e-commerce risks. What are some other things your team willneed to consider during the planning phase for this audit?

Direct Materials and Direct Labor Variances

Huron Company produces a commercial cleaning compound known asZoom. The direct materials and direct labor standards for one unitof Zoom are given below.

Standard qnty of hrs standard price orrate Standardcost

Direct Materials 4.6 pounds $2.50per pound $11.50

DirectLabor 0.2pounds $12.00 perpound $2.40

During the most recent month, thefollowing activity was recorded:

Twenty thousand pounds of material were purchased at a cost of$2.35 per pound.

All of the material purchased was used to produce 4,000 units ofZoom

750 hours of direct labor time were recorded at a total laborcost of $10,425

Required:

Compute the direct materials price and quantity variances forthe month

Compute the direct labor rate and efficiency variances for themonth