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One partner in Class stated that she have “heard management speak of how the audit team really would do a much better job (for the money) if they tried harder to

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One partner in Class stated that she have “heard management speak of how the audit team really would do a much better job (for the money) if they tried harder to really understand the business side of things before digging into the financials.” What do you believe is keeping them from understanding the “business side of things”? Do you think it is because they lack the time or budget to go more in-depth in their review? Or is it perhaps due to a lack of experience in the particular company or industry being audited? In your opinion, what do you think they could do to get a better understanding of your business?

A proposed project has fixed costs of $73,000 per year.

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A proposed project has fixed costs of $73,000 per year. the operating cash flow at 8,000 units is 87,500. Ignoring the efect of taxes, what is the degree of operating leverage? If units sold rise from 8,000 to 8,500, what will be the increase in operating cash flow? What is the new degree of operating leverage?