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Question 76 2 pts You are auditing payroll for Cragston Star Products for the year ended 12/31/2019. Included next are amounts from the client's trial

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Question 76 2 pts You are auditing payroll for Cragston Star Products for the year ended 12/31/2019. Included next are amounts from the client's trial balance, along with comparative audited information for the prior year. Preliminary Balance Audited Balance 12/31/2019 12/31/2018 Sales $ 84,127,502.00 $ 73,154,350.00 Executive Salaries $ 895,500.00 $ 785,480.00 Factory hourly payroll $ 15,018,795.00 $ 14,311,020.00 Factory supervisors' salaries $ 1,152,875.00 $ 1,120,230.00 Office salaries $ 2,900,148.00 $ 2,837,384.00 Sales Commissions $ 4,456,375.00 $ 3,757,715.00 You have obtained the following information to help you perform preliminary analytical procedures for the payroll account balances. 1. There has been a significant increase in the demand for Cragston's products. The increase in sales was due to both an increase in the average selling price of 5 percent and an increase in units sold that resulted from the increased demand and an increased marketing effort. The increase in unit sold was throughout the year. 2. Even though sales volume increased there was no addition of executives, factory, supervisors, or office personnel. 3. All employees including executives, but excluding commission sales people, received a 5 percent salary increase starting July 1, 2019. There was no salary increase in 2018. Commission salespeople receive their increased compensation through increase in sales. 4. The increased number of factory hourly employees was accomplished by recalling employees that had been laid off. They receive the same wage rate as existing employees. Cragston does not permit overtime. 5. Commission salespeople receive a 10% commission on all sales on which a commission is given. Approximately 50 percent of sales earn sales commission. The other 50% are "call-ins, for which no commission is given. Commissions are paid in the month following the month they are earned. The percentage difference between expected and recorded amounts for sales commissions is 7.8% 18.6% 3.5% 8.6%

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