Page 3 Narrative

1. Page 3 Narrative Albert Alvarado Yu-Chung Mao Amornpran Boonkrong Uwaifo Obanor Carol Hu Rodrigo Viramontes

2. Overview • Document/procedure flowchart • Displays the creation, flow, and destination of documents within a system. • Shows the procedures performed at each level. • Page 3 • Document flow of the manufacturing process.

3. Initial Production Sequence • Production Control and Inventory control coordinate what inventory is needed to support the demands of the sales orders. • Program Management directs Production Control on the quantity needed to meet the demand of the customers. • Production Control and Inventory Control report back to Program Management the time required to complete production of goods.

4. Factor of Availability • Production Control and the Production Departments pass information back in forth to see what items are available for production. • Machines • How many and usage of equipment used for production. • Labor • Figuring our how many hours are required. • How many shifts will be running. • Support Systems • Non-direct material or personnel used in production.

5. Production Control • Communication between other departments to check status and give requests for materials required. • Forwards production orders to cost accounting, production departments, and files a copy in numerical sequence • Sends three copies of material requisition to inventory control. • Retains a copy and files the copy in numerical order. • Distributes one copy of production schedule to production departments and files the remaining copy by document issuance date.

6. Production Departments • Send production order and material requisition to inventory control when partially finished products become finished products. • Transmit time cards to cost accounting. • Forward production status document to production control.

7. Inventory Control • Forwards journal voucher to general bookkeeper. The voucher depicts cost of direct and indirect materials. • Files a copy of material requisition numerically, sends remaining copies of documents to production departments and cost accounting. • Dispatches completed production order to cost accounting.

8. Cost Accounting • Receives reports from the other departments to sum up the costs of direct labor, direct materials, and manufacturing overhead. • Sends journal vouchers to general ledger. The journal voucher includes journal entries of conversion costs and cost of goods manufactured. • Gives completed production order to management

9. General Ledger • Records the journal entries from Cost Accounting and Inventory Control. • Sends a status report to management for review.

10. Journal Entries • Materials placed in production: Work in process x,xxx Material control x,xxx • To record direct materials placed in production Manufacturing overhead x,xxx Material control x,xxx • To record indirect materials placed in production

11. Journal Entries • Conversion costs comprise of direct labor and manufacturing overhead costs. Work in process x,xxx Wages payable x,xxx FWT payable x,xxx FICA payable x,xxx Manufacturing overhead applied x,xxx • To record actual direct labor and estimated manufacturing overhead costs

12. Journal Entries • Conversion Cost continued: Manufacturing overhead x,xxx Accumulated depreciation - machinery x,xxx Rent payable - factory building x,xxx Salary payable - factory supervisors x,xxx • To record actual manufacturing overhead costs

13. Journal Entries • Cost of goods manufactured denotes cost of products completed in current accounting period. The journal entry to account for cost of goods manufactured is: Finished goods x,xxx Work in process x,xxx

14. Thank You Any Questions?