c7 Review Questions
c7 Review Questions
Review Questions:
5. What are the primary determinants for both materials and operations requirements?
o RM requirement the difference between what is needed and what is available in the RM
inventory
o This information comes from analysis of inventory on hand, the sales forecast, engineering
specifications (if any), and the BOM.
o A product of this activity is the creation of purchase requisitions for additional RMs.
7. What document triggers the beginning of the cost accounting process for a given production
run?
The cost accounting process for a given production run begins when the production
planning and control department sends a copy of the original work order to the cost
accounting department.
8. What documents are needed for cost accounting clerks to update the work-in-process accounts
with standard charges?
o Inventory control sends copies of materials requisitions, excess materials requisitions and
material returns.
o The various work centers send job tickets and completed move tickets.
o Standard cost file provides standards.
9. What types of management reports ate prepared by the cost accounting system?
10. What document signals the completion of the production process?
o To evidence that a stage of production has been completed, a copy of the move ticket is sent
back to production planning and control to update the open work order file.
o Upon receipt of the last move ticket, the open work order file is closed.
o The finished product, along with a copy of the work order, is sent to FG warehouse.
o Also, a copy of the work order is sent to inventory control to update the FG inventory
records.
11. What functions should be separated to segregate record keeping from asset custody?
1. Inventory control maintains accounting records for RM and FG inventories. This
activity is kept separate from the materials storeroom and from the FG
warehouse functions, which have custody of these assets.
2. Similarly, the cost accounting function accounts for WIP and should be separate
from the work centers in the production process.
12. Give an example for each of the ff. control activities in the conversion cycle: transaction
authorization, segregation of duties and access control.
13. Distinguish between computer-aided design and computer-aided manufacturing.
Essential activities add value; nonessential activities do not, and should be eliminated.
A companys value stream includes all the steps in the process that are essential to
producing a product.
The master schedule for a production run coordinates the production of many
different batches.
The scheduling task also produces work orders, move tickets and materials
requisitions for each batch in the production run.
The actual production operations begin when workers obtain raw materials from
storekeeping in exchange for materials requisitions.
When the task is complete at a particular work center, the supervisor or other
authorized person signs the move ticket, which authorizes the batch to proceed to the
next work center.