Bài giảng Romney_ais13 - Chapter 14: The Production Cycle

The Production CycleChapter 1414-1Learning ObjectivesDescribe 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.14-2Production Cycle ProcessProduct DesignSource documents: bill of materials and operations listPlanning and SchedulingSource documents: Master production schedule, production order, and materials requisitionProduction OperationsCost Accounting14-3Production Cycle Process14-41. Product Design 2. Planning and SchedulingThreatsControlsPoor product design resulting in excess costsOver and under production1 a. Analysis of costs arising from product design choices b. Analysis of warranty and repair costs2 a. Production planning systems b. Review and approve production orders and schedules c. Restrict access to orders and schedules14-53. Production OperationsThreatsControlsInventory theftFixed asset theftPoor performanceSuboptimal investments in fixed assetsLoss of inventory or fixed assets due to fire or disastersDisruption of operations1 a. Restrict physical access b. Document movement of inventory c. Segregation of custody duties from authorization and recording2 a. Restrict access to fixed assets b. Keep detailed records of fixed assets including disposals3 a. Performance reporting4 a. Solicit competitive bids5 a. Insurance and physical safeguards6 a. Backup and disaster recovery plans14-64. Cost AccountingThreats ControlsInaccurate cost dataInappropriate allocation of overhead costsMisleading reports1 a. Source data automation b. Data processing integrity controls2 a. Time-driven activity-based costing3 a. Performance metrics14-7Cost Accounting SystemsProvide information for planning, controlling, and evaluating the performance of production operationsProvide accurate cost data about products for use in pricing and product mix decisionsCollect and process the information used to calculate the inventory and cost of goods sold values that appear in organization’s financials14-8Key TermsProduction cycleBill of materialsOperations listManufacturing resource planning (MRP-II)Lean manufacturingMaster production schedule (MPS)Production orderMaterials requisitionMove ticketComputer-integrated manufacturing (CIM)Request for proposal (RFP)Job-order costingProcess costingJob-time ticketManufacturing overheadActivity-based costingCost driverThroughput14-9