Page 176 -

Chapter 5
SITUATION 3
Background data

Today’s date 7/13/13
Current list price, NRG-A $1.50/bar
156 Current list price, NRG-B $1.60/bar
Accounts receivable balance at start of business day, ACORN Corporation $6,000
Credit limit, ACORN Corporation $6,000
Current order
Product NRG-A
Amount 150 boxes (3,600 bars)

Price List
Ship to ACORN headquarters
Date desired 7/15/13
Next invoice number A1300
Documents in system
A check from ACORN was received in yesterday’s mail and entered into the accounting system. The
check is for $2,000, applied to invoices from June’s sales. The sales clerks are working from credit-
limit printouts prepared at the beginning of the week (two days ago).
Source Line: Course Technology/Cengage Learning.

e. Given the information currently in the system, will credit be granted or denied for
ACORN Corporation’s current order?
f. If the system processed data in a more timely way, would credit be granted or denied?
5. ERP systems save time for accountants in many ways. Some researchers expected that
job opportunities for accountants would diminish with the implementation of an ERP
system. In reality, accountants are needed more than ever in industry. Use an online job
search Web site and look at the jobs available for accountants. How many positions require
experience with ERP systems? Do any positions require data analysis capabilities that
involve Business Warehouse technology?
6. Companies usually prepare annual division- and company-wide budgets that show
projected monthly results, such as: sales, cost of sales, inventory levels, cash on hand, and
other key data. Such budgets are effective for planning and controlling operations if they
are designed as “flexible” budgets. A flexible budget is restated as conditions change from
month to month, so goals remain reasonable and useful for evaluating performance. If not
kept up to date, budgets are not useful for planning and controlling operations.
If information systems are unintegrated, getting data from the company’s departments to
create the initial budget is a chore, and keeping the data current is often so difficult that it is
not done. Thus, while the flexible budget concept is a good idea, it is difficult to achieve
with unintegrated systems. Because ERP makes flexible budgeting more achievable, ERP

Copyright 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.