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    Problem 14

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    monsin
    The document defines various production planning and control terms including bill of materials, master production schedule, production order, and job-order costing. It also describes potential problems such as overproduction or theft of inventory and lists internal controls that could help prevent or detect these problems, such as maintaining accurate perpetual inventory records and implementing documentary control over work-in-process inventory movements. Finally, it provides examples of errors that could occur when entering job-time or production data and recommends validation checks and input controls to prevent or identify such mistakes.

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    Problem 14

    Uploaded by

    monsin
    198 views3 pages
    The document defines various production planning and control terms including bill of materials, master production schedule, production order, and job-order costing. It also describes potential problems such as overproduction or theft of inventory and lists internal controls that could help prevent or detect these problems, such as maintaining accurate perpetual inventory records and implementing documentary control over work-in-process inventory movements. Finally, it provides examples of errors that could occur when entering job-time or production data and recommends validation checks and input controls to prevent or identify such mistakes.

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    The document defines various production planning and control terms including bill of materials, master production schedule, production order, and job-order costing. It also describes potential problems such as overproduction or theft of inventory and lists internal controls that could help prevent or detect these problems, such as maintaining accurate perpetual inventory records and implementing documentary control over work-in-process inventory movements. Finally, it provides examples of errors that could occur when entering job-time or production data and recommends validation checks and input controls to prevent or identify such mistakes.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    198 views3 pages

    Problem 14

    Uploaded by

    monsin
    The document defines various production planning and control terms including bill of materials, master production schedule, production order, and job-order costing. It also describes potential problems such as overproduction or theft of inventory and lists internal controls that could help prevent or detect these problems, such as maintaining accurate perpetual inventory records and implementing documentary control over work-in-process inventory movements. Finally, it provides examples of errors that could occur when entering job-time or production data and recommends validation checks and input controls to prevent or identify such mistakes.

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    PROBLEM 14.

    1. Bill of materials A list of the raw materials used to create a finished product. (C)

    2. Operations list A document that lists the steps required to manufacture a finished good. (K)

    3. Master Production Schedule A document that specifies how much of a finished good is to be
    produced during a specific time period. (L)

    4. Lean manufacturing A production planning technique that is an extension of the just-in-time


    inventory control method. (M)

    5. Production order A document that authorizes the manufacture of a finished good. (J)

    6. Materials requisition A document used to authorize removal of raw materials from inventory.
    (D)

    7. Move ticket A document that tracks the transfer of inventory from one work center to another.
    (I)

    8. Job-time ticket A document that records labor costs associated with manufacturing a product.
    (H)

    9. Job-order costing A cost accounting method that assigns costs to specific batches or
    production runs and is used when the product or service consists of uniquely identifiable items.
    (F)

    10. Cost driver A factor that causes costs to change. (A)

    11. Throughput A measure of the number of good units produced in a period of time. (B)

    12. Computer-integrated manufacturing A term used to refer to the use of robots and other IT
    techniques as part of the production process. (O)
    14.2 What internal control procedure(s) would best prevent or detect the following

    problems?

    a. A production order was initiated for a product that was already overstocked in
    the companys warehouse.

    Base the master production schedule on


    Current data on product sales
    Product sales forecasts
    Quantities on hand
    Quantity scheduled or under production

    Maintain accurate perpetual inventory records.

    b. A production employee stole items of work-in-process inventory.

    Ensure good supervision by factory supervisors.


    Implement documentary control over quantities of in-process inventories and their
    movement through the factory (e.g., move tickets).
    Count/record quantities at each workstation and have both parties to any transfer
    acknowledge the transaction..

    c. The rush-order tag on a partially completed production job became detached


    from the materials and lost, resulting in a costly delay.

    Use rush order tags


    Have production schedules indicate the high priority jobs.
    Configure the ERP system to prepare status reports of production so that failure to
    complete portions of the MPS will be detected on a timely basis.
    Use expediters to monitor work on high priority jobs.

    d. A production employee entered a materials requisition form into the system in


    order to steal $300 worth of parts from the raw materials storeroom.

    Limit authority to prepare or authorize materials requisitions to production


    planning personnel and perhaps factory supervisors.
    Have recipient sign a copy of the requisition at the point of issue and send it to the
    accounting department for subsequent posting to the work-in-process records.
    Investigate significant unexplained variances between actual and recorded work
    in process.
    e. A production worker entering job-time data on an online terminal mistakenly
    entered 3,000 instead of 300 in the quantity-completed field.

    Validate input by comparing the quantity entered with the quantity scheduled
    during the elapsed time.
    Flag any amounts that are unreasonably high or low and have the system display a
    request that the worker reenter the quantity.

    f. A production worker entering job-time data on an online terminal mistakenly


    posted the completion of operation 562 to production order 7569 instead of
    production order 7596.

    Have the system keep track of which order each employee is working on and
    o Verify that the production order number properly corresponds to the employee
    number.
    o Verify that the operation number entered corresponds to the production order
    number entered.
    Have any lack of correspondence cause the system to request reentry of the input
    data.

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