Fraud Examination
6th Edition
ISBN: 9781337619677
Author: Albrecht, W. Steve, Chad O., Conan C., Zimbelman, Mark F.
Publisher: Cengage,
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On a beautiful spring morning in 2015, Stephen Lowber, chief financial officer of Cutter and Buck, Inc., slowly arose from his bed, walked across the bedroom floor, and gazed out the window. It was a surprisingly clear, sunny day in Seattle, Washington. Despite the beauty of the day, the expression on Mr. Lowber’s face was not positive. Cutter and Buck, a company that designs and markets upscale sportswear and outerwear, had enjoyed financial success. It recently announced revenue of $54.6 million for the fourth quarter and $152.5 million for the entire fiscal year. Cutter and Buck also announced it was rated as the hottest golf apparel brand from 2010 to 2014 by Gold World Business Magazine, a leading golf trade publication. Despite the success and positive publicity of his company, Lowber was haunted because he knew the company had engaged in fraud.
Cutter and Buck, Inc., had been encountering declining sales as it approached the end of its fiscal year. In the final days of the…
Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont
Fasteners Corporation: "Wes, l'm not sure how to go about answering the questions that came up at the meeting with
the president yesterday."
"What's the problem?"
“The president wanted to know the break-even point for each of the company's products, but I am having trouble
figuring them out."
“I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp
in time for the follow-up meeting at 9:00."
Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina.
Data concerning these products appear below:
Velcro
Metal
Nylon
Annual sales
100,000
200,000
400,000
volume
Unit selling
price
Variable
$1.65
$1.50
$0.85
$1.25
$0.70
$0.25
expense per
unit
Total fixed expenses are $400,000 per year.
All three products are sold in highly competitive markets, so the company is…
Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners
Corporation: "Wes, I'm not sure how to go about answering the questions that came up at the meeting with the president yesterday."
"What's the problem?"
"The president wanted to know the break-even point for each of the company's products, but I am having trouble figuring them out."
"I'm sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the
follow-up meeting at 9:00."
Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data
concerning these products appear below:
Annual sales volume
Unit selling price
Variable expense per unit
Velcro Metal Nylon
192,000 294,000
$ 1.60 $ 1.60
116,000
$ 2.30
$0.90
$ 1.00 $ 1.10
Total fixed expenses are $258,000 per year.
All three products are sold in highly competitive markets, so the company is…
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