Bloomington Enterprises is a manufacturer of model trains that sell under the name Bloomington Toy Trains in toy stores and hobby shops throughout the United States and Europe. The company employs 160 people in its home office and sole manufacturing and storage facility, which are both located in Bloomington, Indiana.

The inventory storeroom is called the stores department, and it is managed by Louis Tyson. Both materials and finished goods are maintained in this area, as well as the supporting inventory records. Louis performs a daily review of the items on hand by monitoring the inventory subsidiary ledger and determining whether additional materials are needed. If they are, Louis prepares a materials requisition form to submit to the production planning department.

The production planning department is led
by Kathy Williams. Upon receipt of a materials
requisition
form from Louis, Kathy files the form.
Kathy’s files contain not only the materials requisition forms received from Louis, but also sales forecasts received from the sales department. These files are monitored on a daily basis; if there is a match between the needs identified by both stores and sales, a bill of materials and a routing slip are prepared and forwarded to the production room. If inventory quantities for supporting materials are sufficient, a production schedule is prepared and forwarded to the production room. If materials are needed to support production of the items, a purchase requisition is prepared and forwarded to the purchasing and stores department.

Kathy Williams is also the supervisor of the production room. Once new documents are obtained from the production planning department, the bill of materials and routing slip are sent to stores, where Louis retrieves the necessary materials. He makes a copy of the bill of materials and routing slips and then returns these documents to the production room, along with the requested materials. At the end of the day, Louis updates the inventory subsidiary ledger and prepares a journal voucher summarizing the day’s use of materials.

In the production room, the leaders of each production line collect employee time cards at the end of each week and send them to the payroll and cost accounting departments. They also prepare weekly job cost reports for the cost accounting department, itemizing the various costs that have been incurred.

Tom Alexander heads the cost accounting department. Tom uses the job cost reports and time cards to create journal vouchers that update the work‐in‐process and finished goods inventory accounts. As new cost data is obtained, the cost accountants are continually accumulating actual cost data to be compared with standard costs. Variances are calculated and compared, and the information is used to evaluate the line workers in the production room, as well as the managers and supervisors of each department.

Dan Smith is responsible for updating the general ledger on a weekly basis. The information from the journal vouchers is entered in the general ledger program, which automatically updates the respective accounts. All journal vouchers are filed in Dan’s office.

Required:

a. Draw a process map of the conversion processes at Bloomington Enterprises.

b. Draw a document flowchart showing the records used in the conversion processes at Bloomington Enterprises.

c. List any strengths and weaknesses in the company’s internal control procedures. For each weakness, suggest an improvement.

d. Describe any benefits that Bloomington Enterprises may receive by installing newer IT systems within its conversion processes. Be specific as to how IT systems could benefit each of the processes described, or how they could eliminate any weakness identified per item c.