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Timo Company is considering two alternatives. Alternative A will have sales of $151,400 and costs of $101,300. Alternative B will have sales of $181,100 and costs of $121,700. Compare Alternative A to Alternative B showing incremental revenues, costs, and net income. (If an amount reduces the net income for Increase (Decrease) column then enter with a negative sign preceding the number e.g. -15,000 or parenthesis, e.g. (15,000). Enter all other amounts in all other columns as positive and subtract where necessary.)
Alternative A
Alternative B
Net Income Increase (Decrease)
Which alternative is better? Alternative AAlternative B
Describe the tolerable exception rate and how you would use this as an auditor. Explain how you would determine the rate you select.
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