Controlling material flow , Managerial Accounting

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

Posted Date: 12/6/2012 5:46:02 AM | Location : United States







Related Discussions:- Controlling material flow , Assignment Help, Ask Question on Controlling material flow , Get Answer, Expert's Help, Controlling material flow Discussions

Write discussion on Controlling material flow
Your posts are moderated
Related Questions
Transfer pricing with third party consequences Transfer prices are used not only for internal record keeping and performance evaluation purposes. There are several settings

Gather Data about Alternatives When potential areas of activity are specified, management must assess the potential growth rate of the activities, the capability of the company

QUESTION:  PART A One of the divisions within Acme Manufacturing company is presently negotiating with another supplier regarding outsourcing component A that it manufac

Have lot of questions please any one help me

Funded debt to total capitalization ratio The ratio establishes a link among the long term funds raised from outsider and total long term funds available in the business. The

Cost Advantage and Value Chain Cost advantage is one of the two types of competitive advantage a firm may possess. Cost is also of vital significance to differentiation strate

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

M/s ABC has an existing sales of Rs.50 lakhs and permits a credit period of 30 days to its customers.  The firm cost of capital is 10% and the ratio of variable cost to sales is 85

The Braggs & Struttin'' Company manufactures an engine for carpet cleaners called the "Snooper." Budgeted cost and revenue data for the "Snooper" are given below, based on sales of

Proprietary ratio/ equity ratio  Meaning: the ratio measures a relationship among proprietor's funds and the total assets. Objective: the objective of computing this ra