Assume that you are the manager of Accounting at Fitter, which is privately owned by a family and headed by a board of directors. The board members are set to visit the company tomorrow morning and would like to see sales data for today, as an example of a typical day. Your boss calls you up and asks you to work with the employees on your team to complete the table shown in Figure 5-18, in anticipation of the board members’ visit tomorrow.
Given Fitter’s current sales order data-processing practices, why will this be a difficult task to complete? Explain the business practices that would cause difficulty in quickly and accurately gathering this data. Why would this task be easy to complete if Fitter had an ERP system? To answer this question, review Chapters 3 and 4 to see how sales orders are processed.
Chapter 5
1. This exercise tests your understanding of the information needed to trace a sale
through a multistep ERP sales cycle: sales order, inventory sourcing, delivery,
billing, and payment. Assume that an order has been placed with your company and
entered into your ERP system. The following events then take place:
a. The system automatically checks the customer’s credit and finds it to be
acceptable. b. The order is recorded for the delivery date requested. c. The system schedules the production of the goods. (There is not enough
inventory to ship from stock.) d. The system schedules raw material orders from the vendors to produce the
goods ordered. e. The raw materials are received and stored. f. The goods are produced and reserved for shipment to the customer. g. The system schedules the delivery, and an invoice is printed and included with
the shipment. The goods are then put on the delivery truck h. Shipping notifies Accounting of the shipment’s details. i. A month later, the customer sends in payment, which is recorded in
accounting. For each of these events, list the information that must be recorded in the common
database. You do not need to know how to use a database to do this, nor do you need
to understand bookkeeping. For example, for the credit-check step, think about what
information is needed to perform a credit check on a given customer. At each step,
did the wealth of the company increase or decrease? At each step, how did the
company’s obligations to outside entities change? At each step, how did the
obligations of outside entities to the company change?
2. Assume that you are the manager of Accounting at Fitter, which is privately
owned by a family and headed by a board of directors. The board members are set to
visit the company tomorrow morning and would like to see sales data for today, as
an example of a typical day. Your boss calls you up and asks you to work with the
employees on your team to complete the table shown in Figure 5-18, in anticipation
of the board members’ visit tomorrow. Given Fitter’s current sales order data-processing practices, why will this be a
difficult task to complete? Explain the business practices that would cause difficulty
in quickly and accurately gathering this data. Why would this task be easy to
complete if Fitter had an ERP system? To answer this question, review Chapters 3
and 4 to see how sales orders are processed.
3. Complete Exercise 4 from textbook chapter 5. Please provide answers to all questions.
4. Review Fitter’s unintegrated production and purchasing procedures, described in
Chapter 4. How would its current job-scheduling, production, and purchasing
procedures result in variances from standard costs? Why would Fitter have trouble
researching these costs at month’s end to adjust the “standard costs per unit” to
accurate “actual costs per unit”?
