Question

Answer the following questions  

1. How can using RFID tags or bar codes on goods or products provide significant benefit in the expenditure cycle?
2. Describe the function of an impress fund.
3. Explain what CIM means and its benefits.
4. What is activity-based costing (ABC) and identify two (2) of the benefits of activity-based costing?
5. What is the difference between a payroll service bureau and a professional employer organization?
6. Explains the purpose of a general ledger payroll clearing account.
7. . Explain two benefits of XBRL.   
8. What is responsibility accounting?

Answer 1

(a) How can using RFID tags or bar codes on goods or products provide significant benefit in the expenditure cycle?

• RFID technology automates data collection and vastly reduces human effort and error. so that product loss will be minimum
• RFID supports tag reading with no line-of-sight or item-by-item scans required. through that significant labour cost can reduced
• Assets can be cross-referenced against assigned locations and recorded as present, missing, or relocated. so that wastage of meterials and assets can be reduced
• Assets and employees can be tracked and located automatically for everything from supply chain and asset management to facility security and emergency planning. so that inspection and varification cost can be reduced significantly
• RFID or Barcode tracks the meterial as well as product through its entire supply chain. by the way of that penality cost due to shortage or miising of products can be elimimated
• By using barcode scanning employees training expenses can be reduced . because data collection is highly automated
• As barcode scanning and RFID is highly automated and integrated into the system, the process can be run without having shutdown or downtime cost
• comparing to manual system revenue can be increase significantly as these tecchnologies are working very fast.

(b).function of an impress fund.

  An imprest fund is a small amount of cash that is set aside for use in paying for incidental expenses. The fund is typically stored in a box or drawer, and is controlled by a custodian who has the authority to make payments. When a payment is made, the custodian hands out cash and replaces it with a voucher that states the purpose of the payment. When the amount of cash in the fund is drawn down to a low level, additional cash is forwarded to it from the company's central accounting system, and the vouchers are used to prepare a journal entry that charges the disbursements to expense.

(c).CIM means and its benefits

CIM means Computer Integrated Manufacturing.It is the manufacturing approach of using computers to control entire production process.This integration allows individual processes to exchange information with each other and initiate actions. Although manufacturing can be faster and less error-prone by the integration of computers, the main advantage is the ability to create automated manufacturing processes. Typically CIM relies of closed-loop control processes, based on real-time input from sensors. It is also known as flexible design and manufacturing

BENEFITS OF CIMS

Many benefits can be obtained from the successful implementation and operation of a CIM system in a manufacturing company. The benefits can be classified into three kinds: technical, management, and human resources quality.

Technical Benefits

Technical benefits obtained from implementation CIM system are:

1. Reducing inventory and work-in-progress:This can be accomplished through the utilization of an MRPII or ERP system. Careful and reliable material purchasing planning and production planning can to a great extent eliminate high inventory and work-in-progress level
2. Improving production efficiency: Through the integration of a production system, planning system, and material supply system, the production processes can be operated in a well- organized way and hence production can be carried out with the shortest possible waiting times and machine utilization greatly increased.
3. Improving product quality: The integration of the company’s business processes, design pro- cesses, and production processes will help in improving product quality. TQM can be put into effect in the CIM integrated environment.
4. Reducing cost: This is the direct effect obtained from the above three benefits.
5. Improving product design ability: Through the integration of CAD, CAPP, and CAM systems, by using the current engineering method, the product design ability of the company can be significantly improved. New and improved products can be designed and developed in a shorter time

Management Benefits

The following management benefits can be obtained from the CIM sysem implementation:

1. Standardizing processes: The business processes, design processes, and production processes can be standardized. This can help to streamline the company’s processes and reduce errors caused by uncontrolled and random operations.
2. Optimizing processes: The business processes, design processes, and production processes can be optimized. This can help to locate bottlenecks in the processes and cost-intensive activities and thus to provide methods to reduce the cost.
3. Improving market response ability: The traditional pyramid organization structure will be changed to flat structure that can greatly improve the speed of response to market change and user requirements.

Human Resource Quality

Almost all employees will be involved in the implementation of the CIM system. Through different courses of training, from CIM philosophy to computer operation, the total quality of the employees can be improved at all levels, from management staff to production operators. More importantly,

employees will get to know better the company’s objectives, situation, technical standards, and man- ufacturing paradigm, inspiring them to devote their energy to improving the company’s operation efficiency.

(d).Activity-Based Costing (ABC) and its benefits

activity-based costing as an approach to the costing and monitoring of activities, which involves tracing resource consumption and costing final outputs. Resources are assigned to activities and activities to cost objects. The latter use cost drivers to attach activity costs to outputs.

  It can be considered as the modern alternative to absorption costing, allowing managers to better understand product and customer net profitability. This provides the business with better information to make value-based and therefore more effective decisions.

ABC focuses attention on cost drivers, the activities that cause costs to increase. Traditional absorption costing tends to focus on volume-related drivers, such as labour hours, while activity-based costing also uses transaction-based drivers, such as number of orders received. In this way, long-term variable overheads, traditionally considered fixed costs, can be traced to products.

benefits of Activity-based costing

1. Activity-based costing provides a more accurate method of product/service costing, leading to more accurate pricing decisions.
2. It increases understanding of overheads and cost drivers; and makes costly and non-value adding activities more visible.It also enables improved product and customer profitability analysis.