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 Sandy LaneSandy Lane'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, factory supervisors, or office personnel.
3.	All employees including executives, but excluding commission salespeople, received a sixsix 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. Sandy LaneSandy Lane does not permit overtime.
5.	Commission salespeople receive a sevenseven percent commission on all sales on which a commission is given. Approximately 8080 percent of sales earn sales commission. The other 2020 percent are "call-ins," for which no commission is given. Commissions are paid in the month following the month they are earned.

Audited Balance

Preliminary Balance

10/31/2015

10/31/2016

Sales*

$57,590,900

$62,774,081

Executive salaries

529,481

629,481

Factory hourly payroll

10,603,817

11,100,499

Factory supervisors' salaries

659,285

829,583

Office salaries

2,003,912

2,905,881

Sales commissions

2,305,911

2,827,321

*Sales have increased 9% over prior year. 2% percent of that is due to an increase in the average selling price. The remaining 7% is attributed to an increase in the number of units sold.

You are auditing payroll for the

Sandy LaneSandy Lane

Technologies company for the year ended October 31,

20162016.

Included next are amounts from the client's trial balance, along with comparative audited information for the prior year.

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(Click the icon to view the amounts from the trial balance.)

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(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

66%

wage increase and the

77%

increase in the number of units produced and sold. Note 2: Use the increase in the

10/31/20162016

preliminary sales balance over the

10/31/20152015

audited sales balance to determine the expected value for sales commissions on

10/31/20162016.)

		Requirement a.
	(A)	(B)
	Preliminary Balance	Expected Value
	10/31/2016	10/31/2016
Executive salaries	629,481
Factory hourly payroll (see Note 1)	11,100,499
Factory supervisors' salaries	829,583
Office salaries	2,905,881
Sales commissions (see Note 2)	2,827,321