You are auditing payroll for the Harbor Creek 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. LOADING...(Click the icon to view the amounts from the trial balance.) LOADING...(Click the icon to view the additional information.) 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 7% wage increase and the 11% increase in the number of units produced and sold. Note 2: Use the increase in the 10/31/2016 preliminary sales balance over the 10/31/2015 audited sales balance to determine the expected value for sales commissions on 10/31/2016.) Requirement a. (A) (B) Preliminary Balance Expected Value 10/31/2016 10/31/2016 Executive salaries 630,599 Factory hourly payroll (see Note 1) 11,697,055 Factory supervisors' salaries 770,600 Office salaries 2,905,881 Sales commissions (see Note 2) 2,660,499 Enter any number in the edit fields and then click Check Answer

Audited Balance

Preliminary Balance

10/31/2015

10/31/2016

Sales*

$50,064,758

$56,573,177

Executive salaries

501,948

630,599

Factory hourly payroll

10,210,396

11,697,055

Factory supervisors' salaries

770,600

770,600

Office salaries

2,239,582

2,905,881

Sales commissions

2,018,149

2,660,499

*Sales have increased 13% over prior year. 2% percent of that is due to an increase in the average selling price. The remaining 11% 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 significant increase in the demand for Harbor CreekHarbor Creek's products. The increase in sales was due to both an increase in the average selling price of twotwo percent and an increase in units sold that resulted from the increased demand and an increased marketing effort.
2.	Even though sales volume increased there was no addition of executives, factorysupervisors, or office personnel.
3.	All employees including executives, but excluding commission salespeople, received a sevenseven percent salary increase starting November 1, 20152015. Commission salespeople receive their increased compensation through the 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. Harbor CreekHarbor Creek does not permit overtime.
5.	Commission salespeople receive a threethree percent commission on all sales on which a commission is given. Approximately 6565 percent of sales earn sales commission. The other 3535 percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned.