Answer to Question #317123 in Economics of Enterprise for Jen

Question

Where would an REA diagram for the production cycle depict the list of ingredients for making a product?

A. In the bill of materials table

B. In the raw materials table

C. In the work in process table

D. In the finished goods table

Answer 1

The base of the REA model level is the operational level containing three concepts: Resource, Event and Agent. An economic event is divided into incremental or decrement event. These events are instances of the parent concept Event that defines their internal structure.

Why might an REA diagram show relationships between agents? Answer: Relationships between internal agents may be created to model lines of responsibility. Relationships between internal and external agents can also occur