For each of the following situations based on sab no. 101, indicate the audit evidence that should be obtained to determine whether revenue should be recognized or not in the current period: the company you are auditing, thomson telecom, maintains an inventory of telecommunications equipment. bayone telephone company placed an order for 10 new transformers valued at $5 million, and thomson delivered them just prior to december 31. thomson's normal business practice for this class of customer is to enter into a written sales agreement that requires the signatures of all the authorized representatives of thomson and its customer before the contract is binding. however, bayone has not signed the sales agreement because it is awaiting the requisite approval by the legal department. bayone's purchasing department has orally agreed to the contract, and the purchasing manager has assured you that the contract will be approved the first week of next year.

Laval produces lamps and home lighting fixtures. its most popular product is a brushed aluminum desk lamp. this lamp is made from components shaped in the fabricating department and assembled in the assembly department. information related to the 22,000 desk lamps produced annually follows.direct materials $280,000direct labor fabricating department (8,000 dlh × $24 per dlh) $192,000assembly department (16,600 dlh × $26 per dlh) $431,600machine hours fabricating department $15,200mhassembly department $20,850mhexpected overhead cost and related data for the two production departments follow.fabricating assemblydirect labor hours 150,000dlh 295,000dlhmachine hours 161,000mh 128,000mhoverhead cost $400,000 430,000required1. determine the plantwide overhead rate for laval using direct labor hours as a base.2. determine the total manufacturing cost per unit for the aluminum desk lamp using the plantwide overhead rate.3. compute departmental overhead rates based on machine hours in the fabricating department and direct labor hours in the assembly department.4. use departmental overhead rates from requirement 3 to determine the total manufacturing cost per unit for the aluminum desk lamps.