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week6FInalDQs.docxDeontray Johnson
ThursdayJun 4 at 6:09pm
Greetings all,
Companies must follow a standard when trying to compare companies from either a performance standpoint or a financial standpoint. There are standards in the manufacturing realm, better known as ISO and International Organizational Standard, which set guidelines on how standards are measured and put in place. An example of this would be torque wrenches; how they should be stored when both in use and when not in use plus how often they should be calibrated. All companies that are ISO certified follow these guidelines as it is part of an agreement for certification. Failure to follow these guidelines could consist of losing this certification resulting in the loss of international business.
Accountants use GAAP, General Accepted Accounting Principles, which was sanctioned by the American Institute of Certified Public Accountants. In the business realm, accountants play a significant role and are held to a high level of standards. There is a lot of pressure when being an accountant, and that is why accountants have a high level of ethical rules. By an accountant cheating the numbers, it can lead to false information being portrayed to shareholders.
For companies to compare, they must follow the same guidelines. Most facilities use the FIFO (first in first out) system. While most people don't understand the importance of this method, it ensures that old inventory is used first; maybe because of shelf life or perhaps because of a future part change. If you have two of the same facilities or similar facilities and one system were to use FIFO and the other were to use LIFO, it would make a notable difference. Another system that would need to remain the same would be the Return on Investment. Same like formulas should be utilized. Lastly, how projects are accepted. Plants choosing to take on a project should utilize the same function to determine if taking on the project will produce profit turnover in the upcoming years. Projects that are not as plentiful should be reexamined and, if need be, rejected.
Learn about Accounting Standard. (2020). Investopedia. Retrieved 4 June 2020, from https://www.investopedia.com/terms/a/accounting-standard.asp
Schneider, A. (2017). Managerial Accounting: Decision making for the service and manufacturing sectors (2nd ed.) [Electronic version]. Retrieved from https://content.ashford.edu/
Justin Jones
2.ThursdayJun 4 at 6:59pm
Companies with various divisions use decentralization which allows lower-level management to have the power to make decisions. Top-level management determines what type of authority lower managers are able to implement. It is important for companies who use this type of authority system to develop a standard for accounting reporting to mitigate accounting issues for the company as a whole. Although there are many advantages to decentralized authority, there are several issues that can arise from having different accounting methods. One issue that can arise from evaluating divisions that use separate accounting methods is when using Return on Investment (ROI), is defining the profit numerator as well as the investment denominator because they can be different from one division to the next (Schneider, 2012). Other issues can develop when lower level management’s goals are not in line with higher management goals for the organization. Organizations need to strive for goal congruence between all levels of management to ensure everyone is working towards achieving common goals within the organization. Although lower level management should set personal and division goals, they need to ensure that the division is working towards achieving goals that benefit the organization. Companies that use residual income as an alternative to ROI can come across issues when evaluating performance of divisions that differ in size. Divisions that have much higher amounts of assets should be expected to have higher residual income than a division with smaller amounts of assets. Divisions should not be held to the exact standard as others. Rather evaluations should be scaled to the size of the division.
References
Schneider, A. (2017). Managerial Accounting: Decision making for the service and manufacturing sectors (2nd ed.) [Electronic version]. Retrieved from https://content.ashford.edu/
3. Justin Jones
ThursdayJun 4 at 7:23pm
Process time refers to the time that a product is undergoing conversion activities that transform raw materials into a finished good (Schneider, 2012). Regarding the scenario above, the activities that would fall under process time would be the time that it takes to weigh the patient and assign them a room. The time that it takes the dietitian to ask the questions about eating habits would also fall into this category. Tasks that would fall into inspection times would be when the nurse is getting the patients vitals and any other needed samples. The time it takes the doctor into evaluate the samples would also fall in this category. Move time relates to when the patient is put into a waiting room. Wait time would be the time that the patient waits for the nurse to call on them and then the time waiting on the doctor. Storage time is when the patient is moved to a different room to update any records and review any prescription that may have been changed and then heads to reception to make a payment and schedule in follow-up appointments.
Non-value activities are tasks that have to be done but doesn’t add any monetary value to the cost of the service. In this case, I believe that the clerical stuff such as payment and scheduling would fall into non-value activities. I also think that the time that the patient is being moved from one room to another would fall into this category. These tasks, although necessary, take up time and manpower, but don’t allow the ability for the office to be compensated for the effort.
References
Schneider, A. (2017). Managerial Accounting: Decision making for the service and manufacturing sectors (2nd ed.) [Electronic version]. Retrieved from https://content.ashford.edu/
ThursdayJun 4 at 8:37pm
Process time is the amount of time it takes the company to actually produce the product. After the product is produced, it must be inspected. Since most companies don’t ship products immediately after they are inspected, the product then has to be moved to a storage facility until it is ready to ship. After the product is ready for sale, it can be moved out of storage and shipped to the customer. In the given example:
Process time: The patient must weigh in and is then assigned a room. The dietitian comes to review eating habits and talk about how to improve meal planning and weight control.
Inspection time: The nurse assigning the patient to a room gathers all the personal data for updating the medical records, such as insulin dosage, medication, illnesses since last visit, etc. The nurse takes an initial blood sample for blood sugar testing and performs a blood pressure test. The nurse returns to take more blood samples
Move time: Patient enters the outer office, they check in with the receptionist. The patient moves from the waiting room to the inner offices.
Wait time: Patient waits until called by a nurse. Patient then waits until the doctor comes in. Patient then waits until the dietitian comes to review eating habits and talk about how to improve meal planning and weight control
Storage time: The patient returns to the receptionist to pay for the office visit and to schedule the next visit.
Non-value-added activities add costs to your product without enhancing the value. Cost accounting is a managerial accounting division that tracks production costs. As your items move through production, cost accounting identifies which activities add value to your products and which ones do not. In the given example, I would say the non-value added activities include the nurse taking multiple blood samples when she could’ve taken all at once. There is too much moving from one room to another and lots of wait time. These steps do not add value to the end product; if these step can be redesigned or eliminated, the efficiency of the organization would be enhanced.
