An Order Processing Functional System Located in the United States

question 3

Multiple Choice

An order processing functional system located in the United States operates in English and reflects the practices and culture of the United States. Its manufacturing systems business partner located in Taiwan, operates in Chinese and reflects the business practices and culture of Taiwan. They do not accommodate language, business, or their cultural differences into a single system. From the above scenario, which of the following statements is true about the functional systems?

• A) The order processing functional system will eventually be forced to operate in Chinese to reflect the business practices and culture of Taiwan.
• B) The use of enterprise systems, such as ERP, would complicate the existing situation and thus increase data isolation.
• C) Lack of integration will be extremely disadvantageous to the manufacturing systems unit but not to the order processing unit.
• D) The systems can operate independently as long as there is an adequate data interface between them.

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Definitions:

Variable Costing

A method of accounting that encompasses only the variable costs of production, such as direct materials, direct labor, and variable overhead, in the computation of product costs.

Net Income

The net earnings of a business once all costs and taxes are subtracted from its total income.

Variable Costing

An accounting method that only includes variable production costs (direct materials, direct labor, and variable manufacturing overhead) in product costs, with fixed overhead treated as a period expense.

Absorption Costing

An accounting method that includes all manufacturing costs (fixed and variable) in the cost of a product.