Question

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

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

Answer 1

An operational engagement communication concerning the scrap disposal function in a manufacturer should address the efficiency and effectiveness of the function, along with any corrective actions.

Step-by-step explanation:

In the context of a manufacturer's scrap disposal function, an operational engagement communication should address the efficiency and effectiveness of the scrap disposal function and include any observations requiring corrective action. This means evaluating how well the process of disposing of scrap material is performed and identifying any issues that need to be addressed.

While options A, B, and C might be relevant considerations in the broader context of accounting for scrap material, they are not directly related to the operational engagement communication described in the question. The focus of the communication is on the operational aspects of the scrap disposal function, rather than accounting treatment or inventory valuation.

Therefore, the correct answer is D: The efficiency and effectiveness of the scrap disposal function and include any observations requiring corrective action.