Copyright © 2015 Pearson Education, Inc.Learning Objectives • Describe the major business activities and related information processing operations performed in the production cycle.. •
Trang 1The Production Cycle
Chapter 14
Trang 2Copyright © 2015 Pearson Education, Inc.
Learning Objectives
• Describe the major business activities and related
information processing operations performed in the production cycle.
• Identify major threats in the production cycle and
evaluate the adequacy of various control
procedures for dealing with those threats.
• Explain how a company’s cost accounting system
can help it achieve its manufacturing goals.
• Discuss the key decisions that must be made in
the production cycle and identify the information required to make those decisions.
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Trang 3Production Cycle Process
• Product Design
▫ Source documents: bill of materials and operations list
• Planning and Scheduling
▫ Source documents: Master production schedule, production order, and materials requisition
• Production Operations
• Cost Accounting
Trang 4Copyright © 2015 Pearson Education, Inc.
Production Cycle Process
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Trang 51 Product Design
2 Planning and Scheduling
Threats Controls
1 Poor product design
resulting in excess costs
2 Over and under production 1 a Analysis of costs arising from product design choices
b Analysis of warranty and repair costs
2 a Production planning systems
b Review and approve production orders and schedules
c Restrict access to orders and schedules
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Trang 6Copyright © 2015 Pearson Education, Inc.
3 Production Operations
Threats Controls
1 Inventory theft
2 Fixed asset theft
3 Poor performance
4 Suboptimal investments in
fixed assets
5 Loss of inventory or fixed
assets due to fire or disasters
6 Disruption of operations
1 a Restrict physical access
b Document movement of inventory
c Segregation of custody duties from authorization and
recording
2 a Restrict access to fixed assets
b Keep detailed records of fixed assets including disposals
3 a Performance reporting
4 a Solicit competitive bids
5 a Insurance and physical safeguards
6 a Backup and disaster recovery plans
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Trang 74 Cost Accounting
Threats Controls
1 Inaccurate cost data
2 Inappropriate allocation of
overhead costs
3 Misleading reports
1 a Source data automation
b Data processing integrity controls
2 a Time-driven activity-based costing
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Trang 8Copyright © 2015 Pearson Education, Inc.
Cost Accounting Systems
• Provide information for planning, controlling,
and evaluating the performance of production
operations
• Provide accurate cost data about products for
use in pricing and product mix decisions
• Collect and process the information used to
calculate the inventory and cost of goods sold
values that appear in organization’s financials
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Trang 9Key Terms
• Production cycle
• Bill of materials
• Operations list
• Manufacturing resource planning (MRP-II)
• Lean manufacturing
• Master production schedule (MPS)
• Production order
• Materials requisition
• Move ticket
• Computer-integrated manufacturing (CIM)
• Request for proposal (RFP)
• Job-order costing
• Process costing
• Job-time ticket
• Manufacturing overhead
• Activity-based costing
• Cost driver
• Throughput
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