Which of the following facts should be communicated by the auditor to the audit committee?

Potlatch Company manufactures sonars for fishing boats

Model 100 sells for $200. Potlatch produces and sells 5,000 units per year. Cost data are as follows: Variable manufacturing $95 per unit Variable selling and administrative $5 per unit Fixed manufacturing $270,000 per year Fixed selling and administrative $130,000 per year An offer has come in for a one-time sale of 300 units at a special price of $130 per unit. The marketing manager says that the sale will not affect the company's regular sales activities, and that it will not require any variable selling and administrative costs. The production manager says that there is plenty of excess capacity and the sale will not impact fixed costs in any way. What is the effect of this deal on operating income? A) Operating income increases by $200. B) Operating income increases by $1,500. C) Operating income decreases by $10,500. D) Operating income increases by $10,500.

The Ontario Ministry of Transportation advertised a job and it say that only women and minorities will be considered for the position. A court would most likely rule this ad is

A) illegal and the Ministry has violated the Charter B) illegal and the Ministry has violated the Ontario Human Rights Code C) discriminatory but probably a valid affirmative action program so it is legal under the Charter D) legal as the government can hire whomever it want for any reason E) legal but only if it hires minorities, but illegal if it hires women