Connally Company's Payroll Department Required That Every Time Card Be

question 38

Essay

Connally Company's Payroll Department required that every time card be checked twice to ensure pay accuracy. The company has 1,000 employees and has determined that the checks cost the company $8,000 per year. It has decided to change this policy and only check those names that appear on the exceptions report and a random check on the entire payroll. Currently, only 15% of the payroll is evaluated each payroll. Determine the inspection activity cost per employee on the 1,000 employees both before and after the improvement.

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Definitions:

Plant Asset

Long-lived, tangible assets used in the operations of a business, typically including buildings, machinery, and equipment.

Trade-in Allowance

The value offered by a seller for a buyer's existing asset as part of the payment for a new asset.

Accumulated Depreciation

The total amount of an asset's cost that has been allocated as depreciation expense over the asset's useful life.

Cost Basis

The original value or purchase price of an asset or investment for tax purposes, adjusted for stock splits, dividends, and return of capital distributions.