Question

An operational engagement communication that concerns the scrap disposal function in a manufacturer should address

A. The efficiency and effectiveness of the scrap disposal function and include any observations requiring corrective action.
B. Whether the scrap material inventory is reported as a current asset.
C. Whether the physical inventory count of the scrap material equals the recorded amount.
D. Whether the scrap material inventory is valued at the lower of cost or market.

Answer 1

An operational engagement communication concerning scrap disposal should address the efficiency and effectiveness of the function, including any corrective action needed; option A is the correct perspective.

Step-by-step explanation:

An operational engagement communication concerning the scrap disposal function in a manufacturer should address the efficiency and effectiveness of the scrap disposal function and include any observations requiring corrective action. This typically refers to assessing whether the processes related to scrap disposal are carried out in a manner that minimizes waste, costs, and environmental impact while maximizing the recovery of value. Effective scrap disposal can contribute to the overall operational efficiency of a manufacturing firm.

Option A is the correct perspective for an operational engagement communication, emphasizing not only the current status of the scrap disposal function but also areas for improvement. Options B, C, and D, on the other hand, relate more directly to accounting practices concerning inventory valuation and physical inventory counts, which, while important, are not the primary focus of operational communications concerning scrap disposal.