Accounting Information Systems Study Set 26

Business

Quiz 7 :

Conversion Business Process

Quiz 7 :

Conversion Business Process

Question Type
search
arrow
Describe how you would change Figure 7.5 to implement an activity-based costing system with three different cost drivers. img
Free
Essay
Answer:

Answer:

Unified modelling language (UML) Class diagrams
It is a type of UML diagram and is structured using UML notations. They have many similarities with entity-relationship diagram. It works as a description of logical structure of the database system.
Activity-based costing system
It is a system of costing that assigns, each activity of a business, the cost. The assignment of overheads are most commonly done into the direct costs in this system of costing. This system monitors and traces the consumption of resources.
Cost driver
It is the unit that changes the cost of the activity. The cost behavior in an activity is determined by the cost drivers. These drivers are the determinants of activity's cost. In activity-based costing, all the cost driver must be allotted costs.
Having a look at the figure (Figure 7.5), it can be seen that the UML model of a company's conversion process is given. The UML model shows the associations between classes and how the process is performed.
Looking at the multiplicities, associations can be explained. Material and material issued are associated to each other with a many-to-many relationship, which means many materials can be issued through many inventories of material.
Further, materials and bill of material are associated to each other with a one-to-many relationship, which means that many material can be recorded in the bill of material. Product and product categories are related to each other with a one-to-many relationship, which means that many products can be shown under one product category.
Material issued and product authorization is associated with each other with a one-to-many relationship, which means that a product authorization can be made for every lot of materials issued.
Purchases, material issued, product authorizations, and orders are related to the company's partners with a one-to-many relationship, which means many purchases, issue of materials, and orders can be made from a partner of the company.
To change a traditional costing system into the activity-based costing, all one has to do is to assign costs to every activity of the process. The usage of cost drivers in all the activities has to be recorded.
This, according to the definition of the activity-based costing, is what the activity-based costing does differently than the traditional costing system.
So, to change the figure 7.5 so that the activity based costing system can be implemented by the business. The record of the cost driver's usage has to be made, and costs will have to be assigned to every activity.

Tags
Choose question tag
close menu
arrow
Compare the generic UML class diagram for the conversion process shown in Figure 7.4 with a generic sales and collection diagram, similar to Figure 5.8. Describe the similarities and differences and explain the reasons for those similarities and differences. img img
Free
Essay
Answer:

Answer:

Conversion Process
It is the process of conversion of raw material into finished goods by directing raw material and labor into the process, in order to meet the demands of the customers. The process also keeps the track of all the accounting information of man and material included in the process of transformation of raw material into work-in-process and work-in-process into finished goods in order to calculate the cost of the manufactured goods.
Unified modelling language (UML) Class diagrams
It is a type of UML diagram and is structured using UML notations. They have many similarities with entity-relationship diagram. It works as a description of logical structure of the database system.
Sales and collection process
It is a process which involves activities of business related to product and services' sales maintaining and billing customers and recording their payments. The process generates the recording of sales and revenue.
In sales and collection process all the accounting transactions are generated that record sales revenue, accounts receivables and receipts in cash. This process also affects those firm's costs of goods sold and inventory that engage in selling merchandise. Sales are generally made in return of cash or credit. It may also include sales tax.
When a sale is made in return for cash, the balance of cash increases and when on credit, the accounts receivables are made which is the money that is owed to the firm from sales of product and services. And finally, when a credit customer pays cash, the cash balance increases and accounts receivables are decrease by the amount paid.
The generic UML diagram for conversion process in the figure (figure 7.4) and the Sales and collection process made from the UML diagram given in the figure 5.8, when compared, following observations came into light, which are:
They both involve the similar events, agents, and resources, which is the only similarity which can be seen in the comparison of sales and collection process of figure 5.8, and UML diagram of figure 7.4.
Further, looking at the differences one can see that the figure 7.4 does not include any external agent and there are no events that evidently affects cash, which is a noticeable inclusion in the figure 5.8.
The further observation is that the event of authorization and events related to it are included in both the figures which records labor operations and issue of materials.
The reason behind this is that the raw materials, internal resources, and inventory of finished good is described in the conversion process. The only difference that can be seen is that the external parties interactions are not seen in the conversion process.

Tags
Choose question tag
close menu
arrow
Which of the following describes the purpose of a swimlane in BPMN? a. Indicate the start of the process B) Indicate the end of the process C) Identify different activity flow options D) Distinguish specific responsibilities for performing different tasks E) None of the above
Free
Multiple Choice
Answer:

Answer:

Swimlane in BPMN
It is a type of flow chart which shows the process from start to finish line, but the only distinction of it, from other processes is that it divides the steps into categories, in order to distinguish the department or the employee responsible for the task. The BPMN refers to the Business Process Model and Notation.
Consideration of all the options for the option which defines the purpose of the swimlane in BPMN
Every process has a point of beginning which describes the product that need to be produced in a particular quantity. So, indicating the first point cannot be purpose of such BPMN.
Thus, the option a is incorrect.
Every production process also has an end point which defines the resultants that need to be found and whether they are as per the set standards. So, indicating the last point cannot be purpose of such BPMN.
Thus, the option b is also incorrect.
Identification of the different activities via flow functions illustrates the executed activities in the process and what action leads to which type of result until the process reaches to it end.
Thus, the option c is also incorrect.
It extricates the specific responsibilities to be performed by the specific department. It removes all the bottlenecks in the process and also helps different departments to work together by removing the problem of work overlapping of different departments.
Therefore, option
img is correct.

Tags
Choose question tag
close menu
arrow
Which of the following activities results in work-in-process moving to finished goods inventory? a. Authorize production B) Inspect work C) Complete production D) Issue raw material E) None of the above
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Describe some businesses that use conversion processes. Do they all use the same sequence of activities? Do they all share the same information structure? Discuss some of the differences in those conversion processes.
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Which of the following is not a purpose of using swimlanes to describe the conversion process? a. Document the sequence of activities in the process B) Expose potential problems in the handoff between organizational units C) Show important decision points, and identify responsibility for those decisions D) Establish internal control activities, such as segregation of duties E) All of the above
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Think about the UML class diagrams for the sales and collection process described in Chapter 5 and the purchase and payment process described in Chapter 6. If you were asked to prepare an integrated model that shows those two processes as well as the conversion process, where would the models intersect/integrate? Why? What elements are unique to each process? img
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Consider a UML class diagram of the conversion process that uses the REA framework. Which of the following events begins a typical conversion process? a. Assign employees to departments B) Authorize production C) Issue raw material into work in process D) Sell finished goods E) None of the above
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Penny loves pastries. She wanted everyone else to love pastries, too, so she started Penny's Pastries in Orange County about three years ago. After a shaky start, she scored a big contract with Starbucks to provide pastries to all stores in southern California. This case describes Penny's daily baking process. Penny's bakery starts preparing fresh pastries every morning about 1:00 a.m. for delivery to local stores by 5:30 a.m. The selection and quantity of pastries varies according to the day of the week as well as the time of the year. Inventories Although Penny has a number of her own specialties, she makes many of her baked products according to Starbucks' requirements. So, every day she makes some of her own pastries for sale in her bakeries as well as all the pastries for the various Starbucks locations. Currently, her finished goods inventory can include more than 50 different kinds of pastries and baked products. Because of the volume that Penny produces, she maintains an extensive inventory of the ingredients that she uses in her baked goods, such as flour, butter, milk, chocolate, and cinnamon. Baking Plans Penny carefully plans the contents and preparation of each finished product (pastry and baked good). There are two parts to her formal plans-an ingredient list and a recipe-for each baked product. The ingredient list specifies the quantity of each ingredient required for each finished product. The recipe steps define the sequence of steps that her bakers follow to prepare each finished product. The recipe steps also set the standard number of labor-hours, as well as the specific equipment used, to prepare a standard batch of each finished product. Daily Baking Process Early each morning, the supervisor prepares a daily baking order that specifies the quantities of all the different finished products to be prepared that day. As soon as the various products and quantities are known, an inventory clerk uses the ingredient list to issue all the ingredients necessary for the day, moving them from the storeroom to the baking area. In some cases, the clerk may issue ingredients several different times for each daily baking order so that none of the refrigerated items are left out longer than necessary. Penny assigns sequential issue numbers to each issue during the day, and the clerk carefully records the quantity of each ingredient issued. Penny's bakers prepare the finished products in batches. Each batch produces one finished baked good product. A supervisor (who could be different from the supervisor who issued the baking order) issues a batch order to start the baking process for that batch. The bakers then prepare the ingredients in a series of baking steps according to the recipe for that product using the equipment and ovens specified in the recipe. Penny's bakery has an array of ovens and baking equipment, tracked by equipment number, to keep up with the daily baking production volumes. Because each oven has different characteristics, the baking time for each product can depend on the particular oven used. The baking steps usually involve mixing ingredients, preparing the pastries, placing the prepared items in an oven for baking, and then removing the products and placing them on cooling racks, ready for packing. Each actual baking step may involve the use of multiple pieces of baking equipment and multiple bakers. Penny carefully tracks actual hours of labor and equipment use for each baking step. General Information Penny does not separately identify employees as supervisors, inventory clerks, or bakers. There is one employee entity. Information on ingredient lists, recipe steps, finished products, ingredients, and employees is put into the database before those entities are linked to events or type images. a. Draw a BPMN activity diagram that describes Penny's baking process. b. Prepare a UML class diagram with classes, associations, and multiplicities. c. Using the preceding case information and the following attributes list, prepare a listing of the relational tables necessary to support this conversion process. List the tables in the following order: resources, events, agents, type images, and linking tables. img img
Essay
Answer:
Tags
Choose question tag
close menu
arrow
In Figure 7.5, the Labor Operations event tracks direct labor incurred in the conversion process. What event tracks indirect labor? img
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Business rules implement internal controls. Review Table 7.1 and classify each of those business rules listed as access controls as obligatory, prohibited, or allowed as described in Chapter 2. Select two of those business rules and rephrase them, so an obligatory rule is now a prohibited rule, or a prohibited rule is now an allowed rule, and so on. img
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Which of the following is a business rule implementing access control for the conversion process? a. Employee authorizing production cannot modify inventory records. B) System must provide control numbers. C) Employees preparing quotes cannot modify established prices. D) System must create audit trail whenever records are changed. E) None of the above
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Review Figure 7.6. Which of the following describes the purpose of the Bill of Material class? a. Record the invoices from suppliers for materials purchased B) Record the planned raw material contents of each finished good C) Record the authorization of production D) Describe the labor required for each finished good E) None of the above. img
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Put Figure 7.5 in the context of the overall supply chain that starts with the purchases and payments process (Chapter 6) and ends with the sales and cash receipts process (Chapter 5). How would you expand Figure 7.5 to describe Sunset's supply chain in total? img img
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Which of the following is an activity in the conversion process? a. Authorize production B) Issue raw material C) Perform work D) Transfer completed work to finished goods E) All of the above are activities in the conversion process.
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Why should accountants be concerned with the development of bills of material?
Essay
Answer:
Tags
Choose question tag
close menu
arrow
Review Figure 7.6. Which of the following is an incorrect posting of a foreign key? a. Production Authorization primary key becomes a foreign key in Labor Operations. B) Products primary key becomes a foreign key in Bill of Material. C) Product Categories primary key becomes a foreign key in Sunset Partners. D) Products primary key becomes a foreign key in Product Categories. E) All of the above are correct. img
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
Review Figure 7.5. Which of the following describes the purpose of the Labor Operations event? a. Add the cost of direct labor to work in process inventory B) Control the specific labor activities C) Ensure that labor is performed D) Identify production employees E) None of the above img
Multiple Choice
Answer:
Tags
Choose question tag
close menu
arrow
The Rubber Duck Brewing Company is a new microbrewery. Rubber Duck's brewing process converts beer raw ingredients-malt extract, malted grain, adjuncts (rice or corn), hops, yeast, and water-into brewed beer. Over time, Rubber Duck has developed a unique recipe for each of its brewed beers. The recipe describes the specific ingredients, the sequence of brewing steps, the specific equipment, and the type of employees required for each step in the brewing process for each beer. Each step in the recipe may involve multiple ingredients (e.g., barley, hops, malts, and yeast) and multiple pieces of equipment, but it only requires one type of employee. Rubber Duck assigns a unique ingredient number to each ingredient so it can track the quantity on hand. It tracks its brewed beer by the beer name: pale ale, amber ale, porter, stout, lager, pilsner, and so forth. When Rubber Duck decides to brew one of its beers, a supervisor issues a "Brew Order" for that beer, specifying the quantity in gallons to be brewed. Then, the brewing process begins. Several Rubber Duck employees perform each brewing step. Rubber Duck tracks the amount of each raw ingredient actually used in each step as well the time spent by each employee on each step. Rubber Duck tracks its brewing equipment (e.g., mash tuns, whirlpools, fermenters, and conditioning tanks) by equipment item number, and it also tracks which equipment is used and how long it is used in each brewing step. Each brewing step often requires more than one piece of equipment, and some pieces of equipment are used on multiple brewing steps, although many are used in only one step. For safety, Rubber Duck only allows employees to operate equipment that they are qualified to use. When the brewing process is complete, the brewed beer is stored in large copper tanks for aging. Ales require relatively little aging (less than 3 weeks), while lagers may require longer aging (up to 5 weeks). The copper tanks are tracked separately from other brewing equipment. Aging of the beer is not part of the brewing process; it takes place after the brewing process. a. Prepare a UML class diagram that captures Rubber Duck's brewing process. b. Using the preceding information and the following attributes list, prepare a listing of the relational tables, indicating the primary key (PK) and foreign keys (FK) for each table. img
Essay
Answer:
Tags
Choose question tag
close menu