Managerial Accounting Overview Chapter One FINANCIAL MANAGERIAL Outside

Managerial Accounting: Overview Chapter One �FINANCIAL MANAGERIAL � Outside Inside Timely and Relevant Reports � Follow GAAP/IFRS � Standard Report Format unstructured

TRADITIONALLY �“Idleness � if Waste Money” or manpower and machine are not running you are losing money

Push through production---old � PUSH through Production –old way � Three inventories: Raw Materials (RM), Work in Process(WIP), Finished Goods (FG) � RM � Company � | WIP Queque FG Results in Large Inventory waiting to be sold

Lean Production � Lean means Less Costs � Advantages: � Lower Inventory required � Fewer Defects � Less Wasted Effort � Quicker Customer Response

Lean production con’t �Summaries �Value all theories into 1 Added �Flow Chart of Activities �Manufacturing Cell �Just in Time (JIT) �Theory of Constraints

Value Added �Activities that add value per customer �Chip Box vs Dove Box

Flow Chart of Activities � Actions required to make product � Smores � Burn Place between Add SQUEEZE � Marshmellow Graham Cracker chocolate

Add the 3 M’s (Manpower, Machines, Materials) � � Burn Smores Place between Add SQUEEZE � Marshmellow Graham Cracker chocolate � Cook � Burner/Fork Clipper Press � Marshmellow 2 Graham Crk Choc Sq �

Traditional Production � Several � Mixing large Machines with only one job each Machine � Cutting Machine � Wrapping Machine

Manufacturing Work Cell � One Machine performing several jobs � Several Multi-job Machines � Each Machine Mixes-Cuts-Wraps

Just In Time (JIT) � Pull � RM Through Production--- Customer initiates WIP FG (Customer order) � Shipped immediately to customer � No queing of inventory

Theory of Constraints � Control of Bottlenecks � Increase capacity to remove bottleneck where process has smallest capacity � Freeway system --- Norwalk on Interstate 5 � Throughput product time--- Cycle time to manufacture a