1) In class, we discussed a number of documents as presented

1) In class, we discussed a number of documents as presented in Chapter 11. We checked them for accuracy and found that there was one discrepancy, apparent from the face of the documents, that warranted further inquiry. What was the apparent discrepancy that called for additional inquiry?The difference in “Per Inventory Quantity/Price” and “Quantity & Price”.The difference in total hours incurred on a job.The difference in a unit cost between two related documents.The difference in “Quantity Completed” and “Quantity”.None of the other choices are correct.2) If the audit client measures the cost of inventory using the average cost method, then how does the audit client report the value of its ending inventory?Lower of cost or net realizable value.LIFOFIFOLower of cost or marketAverage cost3) If the audit client measures the cost of inventory using the LIFO method, then how does the audit client report the value of its ending inventory?LIFOLower of cost or marketLower of cost or net realizable value.FIFOAverage cost©2017 McGraw-Hill Education. All rights reserved.4) In class we discussed the “Texas Miltronics” problem. To avoid this problem, what substantive audit procedure should be employed to detect this problem?None of the other choices are correct.After confirmation with corporate counsel about the probability of civil or criminal litigation, confirm this confirmation with the audit committee and verify with records from the audit client which support the estimation of probability that litigation will occur.Review the terms of the contract between the audit client and its customer in which the audit client manufactures and sells tangible inventory to its customer. Verify that the audit client has done all that is necessary to have a right to claim the amount of the contract as a debit to Accounts Receivable and a credit to Sales by confirming cost of goods sold on the contract with confirmations from vendors.Understand the audit client’s contracts for sales of its manufactured goods and determine the quality and quantity of raw materials required under those contracts. Then verify purchases in the Inventory account to make sure that the purchases in inventory comply with the quality and quantity of raw materials required under those contracts.Understand the audit client’s loan agreements for purchases of equipment, and determine the quality and quantity of equipment purchased and are serving as collateral for those loan agreements. Then verify with observation of the equipment on the balance sheet date.5) You are auditing a client who makes widgets. You identify the following budgetary information:Total sales and production for the year 5,000 unitsSales price per widget $20.00Cost of direct materials per widget $ 4.00Cost of direct labor per widget $ 6.00Cost of lease space for manufacturing $12,000 per monthIf the client sells and produces 4,000 units, what is the total amount of annual fixed costs included as a production cost at this level of production?$24,000$144,000$194,000$90,000$240,000$96,000