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how to do this? Mary Ann's Creamery (MAC) Mary Ann's Creamery (MAC) operates out of four stalls in an amusement park in South Carolina. The
how to do this?
Mary Ann's Creamery (MAC) Mary Ann's Creamery (MAC) operates out of four stalls in an amusement park in South Carolina. The stalls are of equivalent size and are portable. MAC is allowed to position the stalls anywhere in the park. MAC offers three flavors of soft ice cream cones and a choice of toppings. The business is tied to the number of customers that pass by the stalls. Therefore, management monitors where the stalls should be located (based on which rides are drawing the crowds, special attractions, etc.) so as to get the most sales possible. Sales by day is a key management statistic. Management has monitored sales per person entering the park and has found the percentages to be consistent over the past three years. Mary Ann's Creamery (MAC) monitors the sales mix of its ice cream cones to ensure that prices are set appropriately. Prices are set so that small cones are cheap enough that parents will buy them for each child. Large cone prices are set so that adults will choose to buy a large cone instead of a medium cone because the difference is not that much. Management experience is that the sales mix is fairly constant as follows: Comparative purchase information: MAC enters into a fixed price contract each year for the ice cream. Comparative park attendance information: Management tracks the number of days over 80 because they have noted in the past that sales per person entering the park increases by 30% when it is over 80. Required: The senior on the audit of Mary Ann's Creamery wants to use analytical procedures as substantive evidence to support the balance in the revenue account. You were asked to complete the following: 1. Identify the factors that are expected to affect the amount of gross revenue for Mary Ann's Creamery. 2. Develop an expectation of the amount of gross revenue (an actual dollar amount) for 2022 based upon the information provided. 3. Assume that the tolerable difference for this account is $300,000 and that the recorded balance is $9,107,491. Based upon your answer to part 2 , what would you conclude? What, if any, follow-up procedures would you perform? You are to complete this assignment on an individual basis. Please include your solution in either an Excel (preferred) and/or Word document. [It may be best to use MS Word for questions 1 and 3 , and MS Excel for question #2]. Your analysis should be organized so that your audit senior, who will be reviewing your analysis, can easily understand the computations you are making. All amounts, rows, and columns should be labeled with appropriate headings. Mary Ann's Creamery (MAC) Mary Ann's Creamery (MAC) operates out of four stalls in an amusement park in South Carolina. The stalls are of equivalent size and are portable. MAC is allowed to position the stalls anywhere in the park. MAC offers three flavors of soft ice cream cones and a choice of toppings. The business is tied to the number of customers that pass by the stalls. Therefore, management monitors where the stalls should be located (based on which rides are drawing the crowds, special attractions, etc.) so as to get the most sales possible. Sales by day is a key management statistic. Management has monitored sales per person entering the park and has found the percentages to be consistent over the past three years. Mary Ann's Creamery (MAC) monitors the sales mix of its ice cream cones to ensure that prices are set appropriately. Prices are set so that small cones are cheap enough that parents will buy them for each child. Large cone prices are set so that adults will choose to buy a large cone instead of a medium cone because the difference is not that much. Management experience is that the sales mix is fairly constant as follows: Comparative purchase information: MAC enters into a fixed price contract each year for the ice cream. Comparative park attendance information: Management tracks the number of days over 80 because they have noted in the past that sales per person entering the park increases by 30% when it is over 80. Required: The senior on the audit of Mary Ann's Creamery wants to use analytical procedures as substantive evidence to support the balance in the revenue account. You were asked to complete the following: 1. Identify the factors that are expected to affect the amount of gross revenue for Mary Ann's Creamery. 2. Develop an expectation of the amount of gross revenue (an actual dollar amount) for 2022 based upon the information provided. 3. Assume that the tolerable difference for this account is $300,000 and that the recorded balance is $9,107,491. Based upon your answer to part 2 , what would you conclude? What, if any, follow-up procedures would you perform? You are to complete this assignment on an individual basis. Please include your solution in either an Excel (preferred) and/or Word document. [It may be best to use MS Word for questions 1 and 3 , and MS Excel for question #2]. Your analysis should be organized so that your audit senior, who will be reviewing your analysis, can easily understand the computations you are making. All amounts, rows, and columns should be labeled with appropriate headings Step by Step Solution
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