Accounting information systems ch15

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Accounting information systems ch15

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Integrated Production Processes (IPP) Learning Objectives • • • • • Appreciate the forces that exist in the contemporary production environment and the trends that have emerged Understand role of enterprise systems in the integration of the total manufacturing environment Understand the key inputs, outputs, data processes and terminology included in modern integrated production processes Understand relationship between IPP and other key business process within a manufacturing organization, including HRM, Purchasing, OE/S, and inventory management Understand the role of inventory management systems and their relationship to IPP IPP IPP Process is a Spoke on AIS Wheel • • In this chapter, we give an overview of one business process, the integrated production process (IPP) We break down the basic steps in the IPP, highlighting the importance of: – enterprise systems – automation – and integration between IPP and the OE/S, purchasing, HRM, and inventory management processes for success in today’s complex, global manufacturing environment Global Manufacturing Environment • Manufacturing is highly sought after by developing nations – Increases wealth and wages of population • Global increases in manufacturing forces domestic companies to become more efficient • Productivity increases in the U.S is a bright spot Manufacturing Pressures • Drivers of complexity reported by Deloitte Touche Tohamatsu – Pressure to reduce costs – Pursuit of new markets – Quickening pace of product innovation Pressure to Reduce Costs • Large retailers are exerting downward pressure on prices • Competition outside the U.S adds downward price pressure • Moving aspects of the value chain to lowercost countries is often the option taken to reduce costs • Companies move everything from design to raw materials supply overseas Pursuit of New Markets • China is a popular new market because of its population and favorable business climate • Expanding into new markets is a significant driver of complexity • Large markets allow manufacturers to recover product development costs Quickening Pace of Product Innovation • Innovative new products are demanded in the market and drive revenue growth • Customization of products is required by global markets • Getting innovative products quickly to market maximizes revenues Successful Companies • Deloitte & Touche report describes the characteristics of successful companies: – Improved internal business process – Better use of technology – Better general capabilities in critical areas • • • • Collaboration Flexibility Visibility Technology Trends in Manufacturing • • • • Product innovation Production process innovation Supply chain management Management accounting systems 10 Record Manufacturing Events • Shop floor control (SFC) process monitors and records status of manufacturing orders as they proceed through the factory – Maintains work center status information showing the degree ahead or behind schedule and utilization levels – May use automatic data collection for immediate feedback and control such as: • Scanning a bar code label attached to the product • Entering quality and quantity information through workstations located on the factory floor • Scanning employee badges and touching a few places on a computer touch screen to indicate labor time the completion of manufacturing tasks – Raw materials issue and return notices will also be recorded 34 Generate Managerial Information • Data collected is usually available in real time • Can be compared with standards for variance analysis in real time • Managers can take corrective action before they even receive the formal variance reports 35 36 Generating Managerial Information 37 Variance Analysis 38 Variance Analysis • Compares actual costs and usage to standards costs and usage • Not perfect, but a useful control measure 39 1.0 Record Standard Costs • Standard cost information contained in master data • Each time move ticket data is entered (department completes work) WIP is updated • Issuance of raw materials updates the WIP 40 2.0 Compute Raw Material Quantity Variance • Differences in RM used – RM are first issued to production in standard quantities – If additional materials are later issued to complete the MO we have an unfavorable usage variance – If unused materials are returned to stock we have a favorable usage variance – Reported through the data flows “Excess RM issue notice” and “RM returned notice,” respectively • Usage variance: multiply the differences in quantities by standard unit costs 41 3.0 Compute Direct Labor Variance • Information captured with an employee card swipe, a bar code scan of the job order, and a few simple entries • Data used to compute DL Variances – – – – Actual pay rates Actual hours Standard Pay Rates Standard Hours • DL rate variance: – (Actual pay rates – standard pay rates) x Actual hours • DL efficiency variance: – (Actual hours – standard hours) x Standard pay rate 42 4.0 Close Manufacturing Orders • Final move ticket data marks the end of the conversion process and the movement of goods to the FG warehouse • Information processing activities that result from the final move ticket are: – Close the cost record maintained in the WIP inventory data and compute the standard cost of the goods completed – Through the data flow “GL cost of goods completed update,” notify the general ledger to make the appropriate entries 43 5.0 Compute Overhead Variances • Usually done at end of an accounting period, often monthly • To compute the manufacturing overhead (MOH) variances: – Retrieve flexible budget from the budgets master data • Flexible budget amount is based on the standard hours allowed to complete the actual finished goods output for the period – Retrieve actual MOH incurred from the GL master data – Retrieve WIP data to determine the standard hours charged to all jobs during the period – Compute the overhead variance • Standard hours charged to all jobs x standard MOH rate per hour • Variances are reported to the GL and the appropriate managers • There are nuances between the variances for variable overhead and fixed overhead which are usually covered in managerial or cost accounting courses 44 Inventory Management 45 Management Fraud • Inventory manipulation is a prime suspect in management fraud • It is typically a large account where fraud my be hidden • AICPA Practice Alert No 94-2 lists types of inventory fraud – In general, inventory is overstated using various techniques including counting empty boxes and consigned goods, falsifying counts, double counting goods in transit, false confirmation of goods held by others, failure to record payable on inventory, falsifying reconciliations 46 Inventory Process controls • Effectiveness of operations – maintain sufficient inventory to prevent stockouts – maintain sufficient inventory to maintain operational efficiency – minimize cost of carrying inventory • Maintain accurate perpetual inventory records (know what inventory levels exist) • JIT materials acquisition (no overstocks) • Internal transfer procedures including global inventory management 47 Inventory Process Controls • Efficiency of inventory operations – JIT materials acquisition including vendor managed inventory (VMI) – Warehouse bin location (optimizes size and location of inventory bins) • Resource security – periodic physical inventory counts – locked storerooms 48 ... Management Accounting Systems Trends • Enterprise software captures data and makes it available across the value chain – Improved systems allow for many more levels of analysis – The emphasis in accounting. .. innovation Production process innovation Supply chain management Management accounting systems 10 Product Innovation • Enterprise systems facilitate the integration of product design, manufacturing and... to as manufacturing resource planning (MRP) 29 Flexible Manufacturing Systems • Flexible manufacturing systems (FMS) are systems used to control actual production of the goods – An FMS is an

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Mục lục

  • PowerPoint Presentation

  • Learning Objectives

  • IPP Process is a Spoke on AIS Wheel

  • Global Manufacturing Environment

  • Manufacturing Pressures

  • Pressure to Reduce Costs

  • Pursuit of New Markets

  • Quickening Pace of Product Innovation

  • Successful Companies

  • Trends in Manufacturing

  • Product Innovation

  • Production Process Innovation

  • Managing Throughput Times

  • Supply Chain Management

  • Slide 15

  • Slide 16

  • Management Accounting Systems Trends

  • Slide 18

  • Integrated Production Process

  • Slide 20

  • The objectives of CAD/CAE are to:

  • CAD/CAE results in several data stores of information that are used later in the IPP

  • Generate Master Production Schedule

  • Slide 24

  • Inventory Management

  • MRP

  • Develop Detailed Production Instructions

  • Slide 28

  • Slide 29

  • Flexible Manufacturing Systems

  • Components of Flexible Manufacturing Systems

  • Just-in-time Objectives

  • JIT Implementation Features

  • Record Manufacturing Events

  • Generate Managerial Information

  • Slide 36

  • Generating Managerial Information

  • Variance Analysis

  • Slide 39

  • 1.0 Record Standard Costs

  • 2.0 Compute Raw Material Quantity Variance

  • 3.0 Compute Direct Labor Variance

  • 4.0 Close Manufacturing Orders

  • 5.0 Compute Overhead Variances

  • Slide 45

  • Management Fraud

  • Inventory Process controls

  • Inventory Process Controls

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