You are auditing payroll for the Cast Iron Technologies company for the year ended October? 31, 2016. Included next are amounts from the? client's trial? balance, along with comparative audited information for the prior year.

Requirements

a.Use the final balances for the prior year and the information in items 1 through 5 to develop an expected value for each? account, except sales.? (Round to the nearest whole? dollar.)

b.Calculate the difference between your expectation and the? client's recorded amount as a percentage using the formula? (expected value-recorded?amount)/expected value. ?(Round to the nearest hundredth? percent, X.XX%.)

?(Note 1: When computing the expected value of factory hourly? payroll, you must take into consideration both the

4% wage increase and the 10?% increase in the number of units produced and sold. Note? 2: Use the increase in the

preliminary sales balance over the audited sales balance to determine the expected value for sales commissions on)

Audited Balance Preliminary Balance 10/31/2015 10/31/2016 Sales* 57,590,900 $ 65,077,717 Executive salaries 592,000 649,215 Factory hourly payroll 9,908,456 11,210,049 Factory supervisors' salaries 797.096 829,583 Office salaries 2,123,405 2,694,881 Sales commissions 2,294,812 2,593,315 *Sales have increased 13% over prior year. 3% percent of that is due to an increase in the average selling price. The remaining 10% is attributed to an increase in the number of units sold.You have obtained the following information to help you perform preliminary analytical procedures for the payroll account balances. 1. There has been a signicant increase in the demand for Cast Iron's products. The increase in sales was due to both an increase in the average selling price of three percent and an increase in units sold that resulted from the increased demand and an increased marketing effort. Even though sales volume increased there was no addition of executives, factory supervisors, or ofce personnel. All employees including executives, but excluding commission salespeople, received a four percent salary increase starting November 1, 2015. Commission salespeople receive their increased compensation through the increase in sales. 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. Cast Iron does not permit overtime. Commission salespeople receive ave percent commission on all sales on which a commission is given. Approximately TD percent of sales earn sales commission. The other 3t] percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned. Requirement a. Requirement b. (A) (B) [(B) - (A)] / (B) Preliminary Balance Expected Value Difference as a 10/31/2016 10/31/2016 Percentage Executive salaries 649,215 % Factory hourly payroll (see Note 1) 11,210,049 % Factory supervisors' salaries 829,583 % Office salaries 2,694,881 % Sales commissions (see Note 2) 2,593,315 %