A small garage business employs the following activities:Supplying and mounting of draw-hooks for caravans.Supplying...A...

60.1K

Verified Solution

Question

Accounting

A small garage business employs the following activities:
Supplying and mounting of draw-hooks for caravans.
Supplying and mounting of fog-lamps.
Supplying and mounting of sunshine roofs.
Repairing of bodywork damage.
Besides the garage proprietor, there are five mechanics who canperform all occurring tasks. The required parts are kept instock.
In the last years, profits have been declining.The garageproprietor thinks that this is mainly caused by some severe controlproblems within the firm. These problems include:
When a customer brings in a car for a repair or a mounting job,an estimation of the costs is provided. Often, the actual priceexceeds the offered price.
When a customer brings in a car for a repair or a mounting job,an estimation of the term of delivery is made. Often, the term ofdelivery is exceeded.
Most clients pay by bank transfer. For that purpose, an invoiceshould be sent to them few days after the job has been finished.Often, the invoice is not made or sent to the client.
Required
Give an explanation of the causes of the mentioned problems.
What measures would you take to solve these problems?
How would you apply a personal computer as a means to regaincontrol over the business?

Answer & Explanation Solved by verified expert

3.8 Ratings (586 Votes)

Causes for the mentioned problems 1Lack of internal control policy regarding invoice issue 2Improper costing estimates and debtor collection system 3Irregularity in delievery system Measures to solve the problems Problem Measure Lack of See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

Transcribed Image Text

In: AccountingA small garage business employs the following activities:Supplying and mounting of draw-hooks for caravans.Supplying...A small garage business employs the following activities:Supplying and mounting of draw-hooks for caravans.Supplying and mounting of fog-lamps.Supplying and mounting of sunshine roofs.Repairing of bodywork damage.Besides the garage proprietor, there are five mechanics who canperform all occurring tasks. The required parts are kept instock.In the last years, profits have been declining.The garageproprietor thinks that this is mainly caused by some severe controlproblems within the firm. These problems include:When a customer brings in a car for a repair or a mounting job,an estimation of the costs is provided. Often, the actual priceexceeds the offered price.When a customer brings in a car for a repair or a mounting job,an estimation of the term of delivery is made. Often, the term ofdelivery is exceeded.Most clients pay by bank transfer. For that purpose, an invoiceshould be sent to them few days after the job has been finished.Often, the invoice is not made or sent to the client.RequiredGive an explanation of the causes of the mentioned problems.What measures would you take to solve these problems?How would you apply a personal computer as a means to regaincontrol over the business?