Importance of recording and documenting production input
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Here are the answers to your questions:
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A four wheel tractor is a
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and apply techniques to check conversions and computations. It also discusses maintaining
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Here are the key points covered in the information sheet:
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- Nail care equipment includes items like manicure tables, foot spa basins, trolleys, etc.
- Nail care materials/supplies that are consumed include items like nail polish, cotton, lotion, foot soak, etc.
- Tools are durable items used by manicurists, while materials are consumable supplies.
- A variety of tools, equipment and materials are needed for services like manicure, pedicure and hand
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The document summarizes key aspects of the production cycle for a manufacturing business. It discusses four main activities: product design, planning and scheduling, production operations, and cost accounting. It describes important documents and decisions for each activity. The accountant's role is to design an accounting information system that provides necessary cost data to support decision-making at each stage of the production cycle.
Production cycle
The document discusses the production cycle, which includes four main activities: product design, planning and scheduling, production operations, and cost accounting. It outlines the objectives, key documents, and business rules for each activity. It also discusses controls that can help ensure the objectives of authorization, validity, recording, asset protection, and compliance are met throughout the production cycle. Automating aspects of the cycle through tools like computer-integrated manufacturing and RFID can help increase productivity, security, and performance.
Basic Cost Management Concepts Chapter 2 McGr.docx
Basic Cost
Management Concepts
Chapter 2
McGraw-Hill/Irwin Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Presenter
Presentation Notes
Chapter 2: Basic Cost Management Concepts
Learning Objective1
2-2
Presenter
Presentation Notes
Learning Objective 1. Explain what is meant by the word cost.
Process of Management
Decision
Making
Directing Control
Planning Strategy
Formulation
Managers need cost information to
perform each of these functions.
2-3
Presenter
Presentation Notes
The process of management involves formulating strategy, planning, control, decision making and directing operational activities. Management accounting information helps managers perform each of these functions more effectively. (LO1)
What Do We Mean By a Cost?
A cost
is the measure of
resources given
up to achieve a
particular purpose.
2-4
Presenter
Presentation Notes
At the most basic level, a cost may be defined as the sacrifice made, usually measured by the resources given up, to achieve a particular purpose. (LO1)
Learning Objective 2
2-5
Presenter
Presentation Notes
Learning Objective 2. Distinguish among product costs, period costs, and expenses.
Product Costs, Period Costs, and Expenses
Product costs are costs associated with goods for
sale until the time period during which the products
are sold, at which time the costs become expenses.
Period costs are costs that are expensed during the
time period in which they are incurred.
Expenses are the consumption of assets for the
purpose of generating revenue.
2-6
Presenter
Presentation Notes
A product cost is a cost assigned to goods that were either purchased or manufactured for resale. Another term for product cost is inventoriable cost, since a product cost is stored as the cost of inventory until the goods are sold. In the period of the sale, the product costs are recognized as an expense called cost of goods sold.
Period costs are all costs that are not product costs. They are expensed in the period they are incurred.
An expense is the cost incurred when an asset is used up or sold for the purpose of generating revenue. (LO2)
Learning Objective 3
2-7
Presenter
Presentation Notes
Learning Objective 3. Describe the role of costs in published financial statements.
Cost Classifications on Financial
Statements – Income Statement
Product Costs
Cost of goods sold
Period Costs
Operating expenses
2-8
Presenter
Presentation Notes
Product costs appear on the income statement as cost of goods sold in the period in which the products were sold. This is true for merchandising and manufacturing companies.
Period costs appear on the income statement in the period in which they were incurred. Selling and administrative expenses are an example of period costs. (LO3)
Cost Classifications ...
F5 a throughput2015
Here are the key steps to determine the optimal product mix given the bottleneck machine capacity and other costs:
1. Calculate the conversion cost per machine hour:
Total weekly operating costs = $5,440
Direct labour costs = $12 per hour x 38 hours per worker x number of workers
Remaining conversion costs = Total operating costs - Direct labour costs
Conversion cost per machine hour = Remaining conversion costs / Maximum machine hours per week
2. Calculate the throughput contribution per machine hour for each product:
Throughput contribution per machine hour = Selling price - Direct material cost
Machine hours required per unit
3. Rank the products based on their throughput contribution per machine hour.
4. Determine the optimal
Documentation in pharmaceutical industry
This document discusses various quality control and documentation procedures in the pharmaceutical industry. It includes 3 key points:
1. It discusses the importance of documentation in defining specifications, methods, providing an audit trail and ensuring authorized personnel have necessary information. This includes documents like specifications, batch production records, SOPs etc.
2. It describes procedures for developing key documents like master formulas, batch manufacturing records, audit plans and reports. This ensures uniform processes and allows tracing of batch history.
3. It discusses quality audits which systematically examine if quality activities comply with arrangements and objectives. This includes internal audits as well as those imposed by regulators or customers.
Basic Cost Management ConceptsChapter 2Copyright ©.docx
Basic Cost
Management Concepts
Chapter 2
Copyright © 2014 by The McGraw-Hill Companies, Inc. All rights reserved.
McGraw-Hill/Irwin
Reviewer (R) - Slide 1 NN
Deleted the words 'and Accounting for Mass Customization Operations' to match the LO as presented in the pages (Hilton 11e).
Reviewer (R) - CHAPTER 2 CORRECTIONS REQUIRED
Note that pagination of the slides is inconsistent. Some slides have a slide number (bottom right), while other slides have no slide number.
Chapter 2: Basic Cost Management Concepts
Learning Objective 2-1 – Explain what is meant by the word cost.
2-*
Learning Objective 2-1. Explain what is meant by the word cost.
Process of Management
Managers need cost information to
perform each of these functions.
2-*
Decision
Making
Directing
Control
Planning
Strategy
Formulation
Reviewer (R) - Slide 3 NN
First sentence: Added a comma after the word 'making.'
The process of management involves formulating strategy, planning, control, decision making, and directing operational activities. Management accounting information helps managers perform each of these functions more effectively. (LO 2-1)
What Do We Mean By a Cost?
A cost
is the measure of
resources given
up to achieve a
particular purpose.
2-*
At the most basic level, a cost may be defined as the sacrifice made, usually measured by the resources expended, or given up, to achieve a particular purpose. The word cost can have different meanings depending on the context in which it is used. The important point is that different cost concepts and classifications are used for different purposes. The purpose of this chapter is to enable the users of this text to gain a firm grasp of the cost terminology used in companies, and which will be used throughout the text. (LO 2-1)
Learning Objective 2-2 – Distinguish among product costs, period costs, and expenses.
2-*
Learning Objective 2-2. Distinguish among product costs, period costs, and expenses.
Product Costs, Period Costs, and Expenses
Product costs are costs assigned to inventory, to goods that are either purchased or manufactured for resale. Another term for product cost is inventoriable cost.
Period costs are costs that are expensed during the time period in which they are incurred.
Expenses are the consumption of assets for the purpose of generating revenue.
2-*
Reviewer (R) - Slide 6 NN
Added two spaces after each of the three bullets.
Last paragraph: Added a space after the last word.
One important way of classifying costs is by the timing of their recognition as expenses for financial reporting.
An expense is defined as the cost incurred when a resource (asset) is used up or sold for the purpose of generating revenue. The resource used up can be: cash, expended directly; a promise to use up cash in the future, recognized as a liability (accounts payable); or the reduction in value of a recorded asset such as plant and equipment (via depreciation) or inven.
McGraw-HillIrwinCopyright © 2011 The McGraw-Hill Companie.docx
McGraw-Hill/Irwin
Copyright © 2011 The McGraw-Hill Companies, All Rights Reserved
Chapter 16
Sales and Operations Planning
16-*
Learning Objectives
Understand what sales and operations planning is and how it coordinates manufacturing, logistics, service, and marketing plans.
Construct aggregate plans that employ different strategies for meeting demand.
Describe what yield management is and why it is an important strategy for leveling demand.
16-*
What is Sales and Operations Planning?Sales and operations planning is a process that helps firms provide better customer service, lower inventory, shorten customer lead times, stabilize production rates, and give top management a handle on the businessThe process consists of a series of meetings, finishing with a high-level meeting where key intermediate-term decisions are madeThis must occur at an aggregate level and also at the detailed individual product level
By aggregate we mean at the level of major groups of products
LO 1
16-*
Types of PlanningLong-range planning: planning focusing on a horizon greater than one year
Generally is done annuallyIntermediate-range planning: planning focusing on a period from 3 to 18 months
Time increments that are weekly, monthly, or quarterlyShort-range planning: planning covering a period from one day to six months
Daily or weekly time increments
LO 1
16-*
The Aggregate Operations PlanSpecify the optimal combination of
Production rate (units completed per unit of time)
Workforce level (number of workers)
Inventory on hand (inventory carried from previous period)Product group or broad category (aggregation)This planning is done over an intermediate-range planning period of 3 to18 months
LO 1
6
6
16-*
Production Planning Strategies
Chase strategy
Match the production rate by hiring and laying off employees
Must have a pool of easily trained applicants to draw on
Stable workforce—variable work hours
Vary the number of hours worked through flexible work schedules or overtime
Level strategy
Demand changes are absorbed by fluctuating inventory levels, order backlogs, and lost sales
LO 1
10
10
16-*
Production Planning Strategies ContinuedPure strategy: when just one of these approaches is used to absorb demand fluctuationsMixed strategy: when two or more of the approaches are usedIn addition to these strategies, managers also may choose to subcontract some portion of production
Similar to the chase strategy, but hiring and laying off are translated into subcontracting
LO 1
16-*
Relevant Costs
Basic production costs
The fixed and variable costs incurred in producing a given product type in a given time period
Costs associated with changes in the production rate
Hiring, training, and laying off personnel
Inventory holding costs
Backorder costs
LO 1
16-*
Level SchedulingA level schedule holds production constant over a period of timeIt is something of a combination of the strategies we have mentioned hereFor each period, ...
LO16-1 through LO16-5EXERCISE 16.1Accounting TerminologyLi.docx
LO16-1 through LO16-5
EXERCISE 16.1
Accounting Terminology
Listed below are eight technical accounting terms introduced or emphasized in this chapter: Listed below are eight technical accounting terms introduced or emphasized in this chapter:
1) Work in Process
2) Inventory
3) Cost of finished goods manufactured
4) Conversion costs
5) Cost of Goods Sold
6) Period costs
7) Management accounting
8) Product costs
9) Manufacturing overhead
Each of the following statements may (or may not) describe one of these technical terms. For each statement, indicate the accounting term described, or answer “None” if the statement does not correctly
describe any of the terms.
a. The preparation and use of accounting information designed to assist managers in planning and controlling the operations of a business.
b. All manufacturing costs other than direct materials used and direct labor.
c. Direct materials and direct labor used in manufacturing a product.
d. A manufacturing cost that can be traced conveniently and directly to manufactured units of product.
e. The account debited at the time that the Manufacturing Overhead account is credited.
f. The amount transferred from the Work in Process Inventory account to the Finished Goods Inventory account.
g. Costs that are debited directly to expense accounts when the costs are incurred.
EXERCISE 16.2 (LO16-2)
Basic Types of
Manufacturing Costs
Into which of the three elements of manufacturing cost would each of the following be classified?
a. Tubing used in manufacturing bicycles.
b. Wages paid by an automobile manufacturer to employees who test-drive completed automobiles.
c. Property taxes on machinery.
d. Gold bullion used by a jewelry manufacturer.
e. Wages of assembly-line workers who package frozen food.
f. Salary of plant superintendent.
g. Electricity used in factory operations.
h. Salary of a nurse in a factory first-aid station.
EXERCISE 16.3 (LO16-3 & LO16-5)
Product Costs
and Period Costs
Indicate whether each of the following should be considered a product cost or a period cost. If you identify the item as a product cost, also indicate whether it is a direct or an indirect cost. For example, the answer to item 0 is “indirect product cost.” Begin with item a.
0. Property taxes on factory building.
a. Cost of disposal of hazardous waste materials to a chemical plant.
b. Amounts paid by a mobile home manufacturer to a subcontractor who installs plumbing in each mobile home.
c. Depreciation on sales showroom fixtures.
d. Salaries of security guards in an administrative office building.
EXERCISE 16.6 (LO16-3 & LO16-5)
Flow of Costs through
Manufacturing Accounts
The Ryde and Rowe Inc. had the following account balances as of January 1:
Direct Materials Inventory . . . .. . . . . . . . . . . . . . . . . . . . . . . . . $ 89,200
Work in Process Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178,400
Fin ...
Product Costing and Cost Accumulation in a Batch Productio.docx
The document discusses product costing and cost accumulation in a batch production environment. It explains that product costs are used for financial accounting, managerial accounting, and cost management purposes. It also describes how costs flow through a manufacturing firm, beginning with being added to work-in-process inventory, then transferred to finished goods inventory when production is complete, and finally expensed as cost of goods sold when products are sold. The document provides an overview of job-order costing and process costing systems.
Different ways to streamline manufacturing inventory process
Manufacturing Inventory Process is an integral part of every business firm and is surrounded by dynamic infrastructure, innovative technology, and complex supply chain. To minimize these complexities and reduce costs, handling accounting and finance appropriately should be the main concern in these industries. Let read about these points to streamline the process.
BMR And MFR
The document discusses Batch Manufacturing Records (BMR) and Master Formula Records (MFR) for pharmaceutical manufacturing. A BMR documents each batch production run and includes the batch number, materials used, production steps, yields, and test results. An MFR is the master document that provides the standard procedure for a product and is referenced when creating individual BMRs. It includes the product name, ingredients, batch size, packaging details, and authorization. Proper documentation with BMRs and MFRs is necessary for quality control and batch traceability in pharmaceutical manufacturing.
Material Management by Joseph F. Valencia
The document provides an overview of materials management, which aims for an integrated approach to managing materials in an industrial setting. It discusses key aspects of materials management including material planning and control, purchasing, stores management, inventory control, standardization, simplification, value analysis, ergonomics, and just-in-time. For each topic, it outlines objectives, scope, functions, advantages, techniques, models, steps, and other relevant information to provide a comprehensive look at materials management.
CCP_SEC1_Cost
A CCP is an experienced practitioner with advanced knowledge and technical expertise to apply the broad principles and best practices of Total Cost Management (TCM) in the planning, execution and management of any organizational project or program. CCPs also demonstrate the ability to research and communicate aspects of TCM principles and practices to all levels of project or program stakeholders, both internally and externally.
Computer- aided Manufacturing Resource Planning
This document provides an overview of computer-aided manufacturing resource planning, including material resource planning (MRP), manufacturing resource planning (MRP II), capacity resource planning (CRP), and enterprise resource planning (ERP). It describes MRP as a computational technique that converts a master schedule for end products into a detailed schedule for raw materials and components. It also outlines the key concepts and inputs used in MRP, including independent/dependent demand, lumpy demand, manufacturing lead times, and common use items. The document then provides brief descriptions of MRP II, CRP, and ERP systems.
Usando ISO 15489 como herramienta de auditoria
Extraordinario documento sobre la Norma ISO 15489 empleada como herramienta de auditoría de los procesos de la gestión documental
Similar to Importance of recording and documenting production input (20)
Basic Cost Management Concepts Chapter 2 McGr.docx
Basic Cost Management Concepts Chapter 2 McGr.docx
Basic Cost Management ConceptsChapter 2Copyright ©.docx
Basic Cost Management ConceptsChapter 2Copyright ©.docx
McGraw-HillIrwinCopyright © 2011 The McGraw-Hill Companie.docx
McGraw-HillIrwinCopyright © 2011 The McGraw-Hill Companie.docx
LO16-1 through LO16-5EXERCISE 16.1Accounting TerminologyLi.docx
LO16-1 through LO16-5EXERCISE 16.1Accounting TerminologyLi.docx
Product Costing and Cost Accumulation in a Batch Productio.docx
Product Costing and Cost Accumulation in a Batch Productio.docx
Different ways to streamline manufacturing inventory process
Different ways to streamline manufacturing inventory process
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Importance of recording and documenting production input
- 2. LEARNING OBJECTIVES: LO 4: Compute the costs of production. (TLE_AFFP7/8MC-IVe-4) Follow the standard procedures in computing for production costs Validate the computed costs of production according to enterprise production requirements.
- 3. IMPORTANCE OF RECORDING AND DOCUMENTING PRODUCTION INPUT 1. It gives us a reference data on the materials used together with their correct magnitude. 2. It determines the economic viability of the product. 3. Records serve as a basis for planning. 4. Records greatly help in making right decisions.
- 4. Steps in recording and documenting production input are as follows: First, weigh all materials and ingredients needed.
- 5. Second, make a necessary listing in your notebook of all the materials and ingredients used. It is important to note how much or how many. This is what we call recording or documentation. Third, follow the correct format in documenting and recording.
- 9. QUIZ