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
State Factors determining Working Capital requirement.

where can I get the solution for the question on this link: http://www.expertsmind.com/questions/determine-the-cash-flow-budget-monthly-cash-disbursement-30145416.aspx I have att

After determining the amount of working capital as in above, a specific amount say 5 percent or 10 percent may be added to cover contingencies. This is to be noted that facts depen

CONTIGENCY THEORY Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is ter

POINT ESTIMATE OF PROBABILITIES This approach requires a number of different values for each of the uncertain variables to be selected. These might be values that are reasonabl

INTERPRETING THE SIMPLEX TABLEAU We can now see that our attention must be directed to reading, interpreting and analyzing the (simplex) results. It is erroneous, however, to a

This is a most familiar form of medium term financing in obtaining plant and vehicles, machinery etc. In hire purchase transactions, the purchaser of goods will obtain the possessi

Determine the Profitability ratios in relation to investment a) Return on capital employed/ return on investment b) Return on equity or return on equity share holders' funds

Each company must establish its own credit policy based on the ground condition and the environment wherein it is operating. The major goal of the credit policy is to stimulate sal

Describe the impact of different types of standards on motivations, and specifically, the likely effect on motivation of adopting the labor standard recommended for Geeta & Company