Controlling material flow , Managerial Accounting

Assignment Help:

Controlling material flow

Figure below outlines the progressive stages in purchasing, issuing and recording materials in a manufacturing concern. An efficient system of documenting and recording is vitally necessary, not only for accounting purposes, but to ensure that the right materials arrive at the right place at the right time.

The purchase requisition submitted to the buyer may be triggered automatically if the system is computerized, by a message from the stores ledger that the reorder level has been reached. Other requests to purchase may be raised by the production planning department for new product materials not yet carried in stock, and also by any departmental head for supplies and equipment of any kind.

The buyer, ideally after making enquiries of several suppliers, sends a purchase order, and eventually the material is received, checked by the good-inwards department as to quality and quantity, and is detailed on a goods-received note (GRN). One copy of the GRN goes to the buyer to write off the outstanding order record; one to the accounts department for checking against the order and invoice—the latter authorizing payment to the supplier; and one to the stores department with the materials.

 

86_flow digarm.jpg


Related Discussions:- Controlling material flow

Annual expected total relevant cost, A purchased product, sold in a retail ...

A purchased product, sold in a retail store, has a normally distributed daily demand, with a mean of 8 units/day and a variance of 4 (units) 2 . Its supply lead time is 6 days and

Strengths and weakness of net book value and paybac, Strengths and weaknes...

Strengths and weakness of net book value and pay back method

Innovations of management accounting and control, Implementing management a...

Implementing management accounting and control innovations are often problematic. Provide a brief commentary around the key factors necessary to give such innovations the best chan

Simulation models, SIMULATION MODELS Simulation is a method of analyzin...

SIMULATION MODELS Simulation is a method of analyzing a system by experimentally duplicating its behavior. Management accountants can be able to make meaningful inferences conc

Explain profitability ratios in relation to sales, Explain Profitability ra...

Explain Profitability ratios in relation to sales a) Gross profit ratio b) Net profit ratio c) Operating ratio d) Operating profit ratio e) Expenses ratio

Types of costs, Types of Costs In short run, costs can be of three gene...

Types of Costs In short run, costs can be of three general kinds: Fixed Cost: Total fixed costs stay constant as volume differs in the relevant range of production. Fixe

What is activity ratio, What is Activity ratio Funds are invested in se...

What is Activity ratio Funds are invested in several assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume

Explain the various stages of product life cycle, Various stages of product...

Various stages of product life cycle Typically the life cycle of a manufactured product will consist of the following stages: 1) market research : before any investment in

Independence of observations, Independence of observations An important...

Independence of observations An important assumption for the simple linear regression model is the independence of errors. In many time series models, this assumption is violat

Joint product decisions, JOINT PRODUCT DECISIONS When a manufacturing C...

JOINT PRODUCT DECISIONS When a manufacturing Company carries out a process operation in which 2 or more joint products are made from a common process a number of decision troub

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd