Q1:
Many computerized accounting packages now come with letter templates that are predesigned and require the name of the client to be added into the template.
If you wanted to send out a notice regarding a big sale to your customers, what would be the preferred way of communication:
Would it be snail mail it or via e-mail? Why?
Would your answer change if this notice was for a contract instead? Why or why not?
Q2: Financial Statements
Roger, a friend of yours, is analyzing the financial statements of the company where he works. The company manufactures customized office furniture and uses the job costing system to track the different types of furniture. He notices some furniture is sold at a loss while the rest at a profit.
He is contemplating whether to recommend discontinuance of the furniture with losses and has come to you for advice. Your advice should provide answers to the following questions:
What would you tell Roger about his idea of discontinuing the products with losses? Give your reasons.
What other factors besides losses should be considered before discontinuing a product? Explain in detail.