Vermont Corporation makes one product and has provided the following information:   Budgeted Selling price per unit $98 Budgeted unit sales, February 11,000 Budgeted raw materials required per unit of output 5 pounds Budgeted raw materials cost per pound $3.00 Budgeted Direct Labor required per unit of output 2.5 hours Budgeted Direct Labor wage rate $18.00 per hour Predetermined manufacturing overhead rate per DL hour (all variable) $11.00 per hr Budgeted variable selling and administrative expense $2.70 per unit sold Fixed selling and administrative per month $43,800   How much is the budgeted operating income or loss in Vermont’s February master (aka static) budget income statement?

(20 points) Fill in your responses to the questions that follow in the text box below.  Make sure to thoroughly and directly answer each question asked.    Terry Shaw was the accountant for a small business. Terry’s wife really liked to shop, and it was causing Terry lots of stress about how he would pay for his wife’s purchases.  Believing he should be earning twice his salary because the company hadn’t given raises in several years, Terry added a “ghost” (aka fictitious) employee to the payroll, which was easy enough to do since he managed the bank accounts, payroll records, and the accounting records. Every pay period, he generated a paycheck to the nonexistent ghost, but thanks to the company’s direct payroll deposit, the money actually went straight to Terry’s bank account. The bank evidently never noticed the discrepancy. During a surprise audit of the payroll account, Terry mysteriously left town. It didn’t take the auditors long to match the direct deposits and uncover the scheme, which cost the company $176,000 over three years.             (Adapted from: Small Business, Big Losses by Joseph T. Wells, Journal of Accountancy, December, 2004)               First, which (of the three major) categories of occupational fraud does this fraud fall into?    Second, (a) identify and (b) define each of the three elements of the fraud triangle.  Then, (c) explain where each of the three elements of the fraud triangle were present in this fraud case.      Third, outside of generally stating “improve internal controls”, describe at least one specific action or policy that this company might have taken/implemented to reduce the risk of this fraud occurring? 

Segment V makes a part that it sells to customers outside of the company. Data concerning this part appear below:   Selling price to outside customers $30 Variable cost per unit $12 Total Fixed Costs per month $20,000 Monthly capacity in units 17,000   Segment B of the same company would like to purchase the part produced by Segment V for use in one of Segment B’s products. Segment B currently purchases a similar part made by an outside vendor for $31 per unit and would substitute the part made by Segment V. Segment B requires 5000 units of the part each month, so they can add additional materials ($4 per unit), direct labor ($3 per unit), and variable overhead ($2 per unit) before selling to external customers for $50 per unit. Segment V has ample available capacity to produce the units for Segment B without any increase in fixed costs and without cutting into its sales to outside customers. What should be the lowest acceptable transfer price from the perspective of Segment V?

Vallerani Corporation has received a customer request for a special order of 5,600 units of product V90 for $27.80 each. Product V90’s unit product cost is $27.40, determined as follows: Direct materials $ 3.00 Direct labor 8.30 Variable manufacturing overhead 7.40 Fixed manufacturing overhead 8.70 Unit product cost $ 27.40 The special order would have no effect on the company’s total fixed manufacturing overhead costs. The customer would like modifications made to product V90 that would increase the variable costs by $4.10 per unit and that would require an investment of $20,000 in special molds that would have no salvage value or other use. This special order would have no effect on the company’s other sales. The company has ample spare capacity to produce the special order. The increase (decrease) to operating income as a result of accepting this special order is about:

Describe the facts in two (2) situations when courts have held that dress codes are evidence of discrimination (not case names).

The current federal child labor law requires that a minor under age 16, in nonagricultural employment, may work no more than __________________ hours on a school day.

Under federal law, a child under age 16 in nonagricultural work cannot work later than [BLANK-1] p.m. during the school year or later than [BLANK-2] p.m. during the summer. (Type times as 12:00 or 1:15 for example)

A court may ______________________ a noncompetition agreement if it wants to enforce it generally, but wants to change one or more of its terms to be more reasonable. [BLANK-1]

A __________________________ is a job requirement that appears to unlawfully discriminate, but is lawful because it is a true job necessity – meaning that “but for” the necessity, it would appear to unlawfully discriminate under one of the prohibited reasons.  Give an example.

____________________ (federal agency) has an SS8 form an employer can submit to receive an advisory opinion on whether a worker is an independent contractor or an employee. [BLANK-1]