User Account

All Pages

Compute the payment time for each invoice

Assignment Help Financial Accounting
Reference no: EM131598952

Case Study Assignment- Payment Time Case Study

Major consulting firms such as Accenture, Ernst & Young Consulting, and Deloitte & Touche Consulting employ statistical analysis to assess the effectiveness of the systems they design for their customers. In this case, a consulting firm has developed an electronic billing system for a Stockton, CA, trucking company. The system sends invoices electronically to each customer's computer and allows customers to easily check and correct errors. It is hoped the new billing system will substantially reduce the amount of time it takes customers to make payments. Typical payment times-measured from the date on an invoice to the date payment is received-using the trucking company's old billing system had been 39 days or more. This exceeded the industry standard payment time of 30 days.

The new billing system does not automatically compute the payment time for each invoice because there is no continuing need for this information. The management consulting firm believes the new system will reduce the mean bill payment time by more than 50 percent. The mean payment time using the old billing system was approximately equal to, but no less than, 39 days. Therefore, if µ denotes the new mean payment time, the consulting firm believes that µ will be less than 19.5 days. Therefore, to assess the system's effectiveness (whether µ < 19.5 days), the consulting firm selects a random sample of 65 invoices from the 7,823 invoices processed during the first three months of the new system's operation. Whereas this is the ?rst time the consulting company has installed an electronic billing system in a trucking company, the ?rm has installed electronic billing systems in other types of companies.

Analysis of results from these other companies show, although the population mean payment time varies from company to company, the population standard deviation of payment times is the same for different companies and equals 4.2 days. The payment times for the 65 sample invoices are manually determined and are given in the Excel spreadsheet named "The Payment Time Case". If this sample can be used to establish that new billing system substantially reduces payment times, the consulting firm plans to market the system to other trucking firms.

Attachment:- Payment-Time-Case-Dataset.rar

Reference no: EM131598952

Questions Cloud

How should platinum fitness account for this payment : Franco purchases a 2 year membership on April 1, 2017 by paying cash of $450. How should Platinum Fitness account for this payment
Tetrahymena absorb food in vacuoles : Would serotonin increase or decrease the rate tetrahymena absorb food in their vacuoles?
Discussion of random error : Explanation of possible selection bias and how it might have affected the results, including a discussion of the size and direction of any possible bias.
Cause of death in the united states : Heart disease is the leading cause of death in the United States. Almost 700,000 people die of heart disease in the U.S. each year.
Compute the payment time for each invoice : The new billing system does not automatically compute the payment time for each invoice because there is no continuing need for this information.
Disease assessment to the discussion board : For this milestone, submit your organ system interrelationship and disease assessment to the discussion board.
Description of the art style called pop art : Image and description of at least four pieces of art created by Warhol.
Capital budgeting analysis : What do you suggest as a cost-effective approach to capital budgeting analysis when a project contains real options
What can you learn from the financial statements : What can you learn from the financial statements of competitors that determine the relative cost position of your company?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Review national health care billing audit guidelines

Review national health care billing audit guidelines. Briefly describe in 2-3 paragraphs the billing audit guidelines ( qualifications of auditors, notifications of audit, role of audit coordinators, etc.

  Does warranty accrual decision create any ethical dilemma

Connor Bly is a sales manager for an automobile dealership. He earns a bonus each year based on revenue from the number of autos sold in the year less related warranty expenses. Does the warranty accrual decision create any ethical dilemma for Bly?

  What is the appropriate rate to use to estimate free miles

What is the appropriate rate to use to estimate free miles? What effect would the estimated liability for free travel by frequent flyers have on 2014 net income?

  Reaching a financial goal

Erika and Kitty, who are twins, just received $45,000 each for their 28th birthdays. They both have aspirations to become millionaires. Each plans to make a $5,000 annual contribution to her "early retirement fund" on her birthday, beginning a year f..

  Discuss the importance and interpretation of the findings

Provide an executive summary which states the problem, how it was investigated, what was found, and what the findings mean. - Discuss the importance & interpretation of the findings.

  Write-off method of accounting for uncollectible accounts

Under the direct write-off method of accounting for uncollectible accounts, Bad Debts Expense is debited

  The exercise of the conversion option on convertible debt

On the Statement of Cash Flows, the exercise of the conversion option on convertible debt would be: Identify which of the following is an accurate description of the proper accounting treatment or the ongoing valuation basis.

  Determine if everyone on the engagement team is independent

YOUCPA is a regional CPA firm engaged in public audit work of small- and medium-size firms in the Midwest. The YOUCPA firm has their main office in Chicago, Illinois, and regional offices in Minneapolis, Minnesota and Indianapolis, Indiana.

  Which produces and sells biking equipment

Income tax is estimated at 40% of income. Determine the earnings per share of common stock, assuming that the income before bond interest and income tax is %15,000,000, $$17,500,000, and $20,000,000

  Selling and administrative expenses

Sprinkle Co. sells its product for $20 per unit. During 2013, it produced 60,000 units and sold 50,000 units (there was no beginning inventory). Costs per unit are: direct materials $5, direct labor $3, and variable overhead $1. Fixed costs are: $240..

  Present value-determine the maximum amount of cash

The dean of the School of Fine Arts is trying to decide whether to purchase a copy machine to place in the lobby of the building. The machine would add to student convenience, but the dean feels compelled to earn an 10 percent return on the investmen..

  Difference in overhead is closed out to cost of goods sold

XYZ Corporation, which applies manufacturing overhead on the basis of machine-hours, has provided the following data for its year 2016 operations: Estimated manufacturing overhead $239,500, Estimated machine-hours 4,500. Was the overhead for the year..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd