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The Conversion Cycle: Introduction To Accounting Information Systems, 7e
The Conversion Cycle: Introduction To Accounting Information Systems, 7e
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
1
Objectives for Chapter 7
Elements and procedures of a traditional production
process
Data flows and procedures in a traditional cost
accounting system
Accounting controls in a traditional environment
Principles, operating features, and technologies of lean
manufacturing
Shortcomings of traditional accounting methods in the
world-class environment
Key features of activity based costing and value stream
accounting
Information systems of lean manufacturing and world-
class companies
Hall, Introduction to Accounting Information Systems, 7e 2
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
The Conversion Cycle
Marketing
System
Sales
Forecast
Purchase Requisitions
Revenue Cycle Sales Orders
Conversion Expenditure
Cycle Cycle
Labor Usage
Work
Finished
In
Goods
Process
General Ledger
and Financial
Reporting
System
Hall, Introduction to Accounting Information Systems, 7e 4
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Production System
Production Scheduling
Coordinates the production of multiple batches
Influenced by time constraints, batch size, and
other specifications
Work Centers and Storekeeping
Production operations begin when work centers
obtain raw materials from storekeeping.
It ends with the completed product being sent to
the finished goods (FG) warehouse .
Engineering Specifications
BOM and Route Sheets Operations Requirements
Production Scheduling
Work Orders
Move Tickets
Materials Requisitions
Open Work Orders
Work Centers
Job Tickets Cost Accounting
Time Cards Payroll
Completed Move Tickets Prod. Plan. and Control
Hall, Introduction to Accounting Information Systems, 7e 16
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Upon Completion of the Production Process
Finished Product Finished Goods Warehouse
and Closed Work Order
Inventory Control
Status Report of Raw Materials
and Finished Goods Prod. Plan. and Control
COST ACCOUNTANTS
Update WIP accounts
STANDARDS DL
DM
Mfg. OH.
Compute Variances
Supervision
work center supervisors oversee the usage
of raw materials to ensure that all released
materials are used in production and waste
is minimized
employee time cards and job tickets are
checked for accuracy
Islands of Technology
Stand alone islands which employ computer numerical
controlled (CNC) machines that can perform multiple
operations with less human involvement
Computer Numerical Controlled (CNC )
Machines
Reduce the complexity of the physical layout
Arranged in groups and in cells to produce an entire
part from start to finish
Need less set-up time
Hall, Introduction to Accounting Information Systems, 7e 35
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Automating Manufacturing
Computer Integrated Manufacturing (CIM)
A completely automated environment which
employs automated storage and retrieval
systems (AS/RS) and robotics
Automated Storage and Retrieval Systems
(AS/RS)
Replaces traditional forklifts and their human
operators with computer-controlled conveyor
systems
Reduce errors, improved inventory control, and
lower storage costs
Hall, Introduction to Accounting Information Systems, 7e 36
2011 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Computer-Integrated Manufacturing
(CIM) System