Which of the Following Statements Best Defines an Enterprise Resource

question 42

Multiple Choice

Which of the following statements best defines an enterprise resource planning (ERP) system?

• A) a demand-pull system in which each component in a production line is produced immediately as needed by the next step in the production line as planned by enterprise resource management
• B) a system that comprises a single database that collects data and feeds it into software applications supporting all of a company's business activities
• C) a planning system that omits recording some of the journal entries relating to the stages from the purchase of direct materials to the sale of finished goods
• D) a system that is made up of work areas with different types of equipment grouped together to make related products

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor.

Net Operating Income

The profit generated from a company's everyday business operations, calculated by subtracting operating expenses from the gross income.

Budgeting

The process of creating a financial plan for a defined period, usually a year, which includes revenue forecasts and expense allocations.