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Is Taking a physical count of inventory necessary when the periodic inventory system is used?
Yes Yes Yes Physical inventory will allow to validate book inventory system. The gaops may be because of errors or worse pilferage, spoilage etc. Both the system are required for effective controls
Importance of management accounting to a manufacturing firm?
Management accountingAccording to the Chartered Institute of Management Accountants (CIMA), Management Accounting is "the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of information used by management to plan, evaluate and control within an entity and to assure appropriate use of and accountability for its Resource (economics) resources. Management accounting also comprises the preparation of financial reports for non-management groups such as shareholders, creditors, regulatory agencies and tax authorities" (CIMA Official Terminology).The Institute of Certified Management Accountants (ICMA), states "A management accountant applies his or her professional knowledge and skill in the preparation and presentation of financial and other decision oriented information in such a way as to assist management in the formulation of policies and in the planning and control of the operation of the undertaking." Management Accountants therefore are seen as the "value-creators" amongst the accountants. They are much more interested in forward looking and taking decisions that will affect the future of the organization, than in the historical recording and compliance (store keeping) aspects of the profession. Management accounting knowledge and experience can therefore be obtained from varied fields and functions within an organization, such as information management, treasury, efficiency auditing, marketing, valuation, pricing, logistics, etc.Significance of management accounting to a manufacturing FirmProviding Information for Decision Making and Planning and Proactively Participating As Part of the Management Team in the Planning ProcessesPlanning is a very essential tool in every manufacturing firm. An entity needs to plan the location of its plants, introduction of new product lines and the strategies required to maintain the assets of the firm. Management accounting assists the firm to make cost-benefit analysis of each alternative and the best decision taken. For example, a soap manufacturing firm before undertaking the manufacture of a new type of soap will collect and analyze data on projected sales volumes, profit margins and costs of inputs. Management accounting provides this data. Any decision taken by the management team in the planning process has an effect on costs, revenues, and management accounting data are essential in estimating those effects. For example, management accountingManagement accounting would enable management to for example, budget for the cost of establishing a new plant and alternatives evaluated for the acquisition of the best plant. Budgets will also include targets to be met in the manufacture of goods. Targets include production volume, sales volume, profit, expenses, pilferage, losses and employee training. These data will be collected, analyzed and summarized for management use in the form of budgets prepared by the management accountant. Management accounting data such as daily sales report is crucial in making decisions as to the number of units to produce.Assisting Managers in Directing and Controlling Operational ActivitiesOperational activities form an integral part of the manufacturing process. The control function enables the operational managers ensure that activities conform to set standards. Detailed reports of various kinds prepared by the management accountant provide feedback as to whether the set standards are being met. Controlling is very essential in inventory control, total quality management and benchmarking in manufacturing firms. A performance report compares budgeted to actual results. In a manufacturing firm performance reports will indicate where some parts of production activities are not proceeding as planned so that corrective measures are instituted to reduce losses. E.g. measures of quality, including internal and external failure rates, yields, and rework can be computed. Measures of productivity efficiency, such as machine availability, throughput and lead times, average inventory levels, and set-up times can be calculated.Motivating Managers and Other Employees toward Organizational GoalsA well motivated staff enhances performance and productivity. Organizations are able to achieve their goals if employees are well motivated. Management accounting through budgeting motivates managers to direct their efforts toward achieving the organizational goals. In a manufacturing firm a budget indicates how resources are to be allocated and what activities are to be emphasized. Employee empowerment is the concept of encouraging and authorizing workers to take the initiative to improve operations, reduce costs, and improve product quality and customer service. For example, employees can be given incentives to develop new products for the organization.Measuring the Performance of Activities, Subunits, Managers, And Other Employees within the OrganizationManagement accounting assists management in measuring the performance of employees in executing organizational objectives. Performance measurement is used as a basis for rewarding performance through positive feedback, promotions and pay rises. Performance measure may be productivity per worker on which compensation may be based. Management accounting also provides data about the performance of the various sub units product lines, geographical units and divisions. These measures are important in determining whether a particular process or subunit (e.g. Quality Control Unit) in the firm is an economic viable unit.Assessing the Organizations Competitive Position and Working with Other Managers to Ensure the Organizations Long Run Competitiveness in the Industry.Globalization has heightened competition and among industries. Management accounting plays a crucial role in ensuring that an organization competes effectively and survives the competition. The financial strength of the organization must be prominent on the agenda of management. Innovative measures must be instituted and operations streamlined. Competitive prices must be adopted by the organization. Data on other competing products must be collected and carefully analyzed before investment decisions are taken. Cost benefit analysis is also important in the adoption of a particular method of production (labour or machines), make or buy decisions, inventory management and outsourcing. Management accounting provides the necessary data for these very essential decisions to be made.ReferencesDrury, C. (2004). Management and Cost Accounting. London: Thompson Learning.Garrison, & Noreen, (2000). Managerial Accounting. New York: Thompson Learning.Hilton, R.W. (1999). Managerial Accounting. New York: Irwin McGraw-Hill.Ingram, et al, (2001). Managerial Accounting: Information for Decisions. Ohio: Thompson Learning.By Kumor Reuben SeyramBachelor of CommerceSchool of BusinessUniversity of Cape Coast, Ghana.
What does TPND means in insurance?
Theft, pilferage and non-delivery
What are the release dates for Where in the World Is Carmen Sandiego - 1991 The Perilous Penguin Pilferage 2-39?
Where in the World Is Carmen Sandiego - 1991 The Perilous Penguin Pilferage 2-39 was released on: USA: 19 November 1992
What influence does the law have on pricing?
Pilferage and shoplifting have an immediate effect on weekly pricing indices.
What are some issues that may arise from the sharing of information are?
CONFLICT MISUNDERSTANDING Risk of pilferage,information leakage,
What Systematic theft of company property by employees is common and is called?
systematic theft of company property by employees, or pilferage , is common
How do pilferage affects the consumers?
Pilferage affects consumers by raising prices to cover the companies losses, and any extra insurance they must purchase to protect their company. i believe it also affects the way stores allow acces to certain items therefor locking up many items and causing inconvienence to consumers wishing to purchae=se these items.
What is the replacement?
The replacement factor is the percentage that is estimated for replacement parts or equipment that will need replacing during a period of time. Some of the factors include natural wear and tear over a period of time, abandoment, vandalism, pilferage minus catastrophies.
What is the replacement factor?
The replacement factor is the percentage that is estimated for replacement parts or equipment that will need replacing during a period of time. Some of the factors include natural wear and tear over a period of time, abandoment, vandalism, pilferage minus catastrophies.
Is Taking a physical count of inventory necessary when the periodic inventory system is used?
Yes Yes Yes Physical inventory will allow to validate book inventory system. The gaops may be because of errors or worse pilferage, spoilage etc. Both the system are required for effective controls
What are some examples of business related crimes?
Among the most common are abuse of power, embezzlement, misuse of business time, computer and electronic information manipulation, intellectual property theft, supply and equipment pilferage, travel expense abuse, and vandalism and sabotage.
What are some nine letter words with 2nd letter I and 5th letter E and 6th letter R and 8th letter G?
According to SOWPODS (the combination of Scrabble dictionaries used around the world) there are 1 words with the pattern -I--ER-G-. That is, nine letter words with 2nd letter I and 5th letter E and 6th letter R and 8th letter G. In alphabetical order, they are: pilferage
What are some nine letter words with 3rd letter L and 5th letter E and 8th letter G?
According to SOWPODS (the combination of Scrabble dictionaries used around the world) there are 4 words with the pattern --L-E--G-. That is, nine letter words with 3rd letter L and 5th letter E and 8th letter G. In alphabetical order, they are: pilferage telferage vellenage villenage
