MOZZA Taste Company is a manufacturer of macaroni. The following are part of its production cycle...

 

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MOZZA Taste Company is a manufacturer of macaroni. The following are part of its production cycle procedures. The production planning and control department was monitored by Harvey as the head of the department. Every week the warehouse clerk reviews the finished goods inventory records and search for low stock items. If some of the stock reaches the minimum level, he notifies the planning and control department verbally to prepare the production schedule. Then, Harvey prepares the production schedule and a few copies of work orders. A copy of the work order is sent to the production department and another copy to the cost accounting department. In the production department, the supervisor creates move tickets and the material requisitions. These documents are sent to the various work centers. Work center employee collects the material needed for the production from the inventory department by showing the material requisition forms. When the product passes through all the work centers, the supervisor signs and collects the move tickets at the end of the last tasks. Then, sends the finished products to the warehouse. The storekeeper receives the material requistion forms and releases the materials to the production. He then updates the inventory records. If the inventory of raw material falls to reorder level, he prepares a purchase order and sends it directly to the respective suppliers. Required: b. Analyze the applicable internal control procedure(s) that would best prevent or detect the following problems: i. A production order was initiated for a product that was already overstocked in the company's warehouse. ii. A production employee stole items of work-in-process inventory. iii. A production employee entered a materials requisition form into the system in order to steal RM500 worth of parts from the raw materials storeroom. iv. A production worker entering job-ime data on an online terminal mistakenly entered 2,000 instead of 200 in the "quantity-completed" field. V. A production worker entering job-time data on an online terminal mistakenly posted the completion of operation 562 to production order 5,769 instead of production order 5,796. 145 made MOZZA Taste Company is a manufacturer of macaroni. The following are part of its production cycle procedures. The production planning and control department was monitored by Harvey as the head of the department. Every week the warehouse clerk reviews the finished goods inventory records and search for low stock items. If some of the stock reaches the minimum level, he notifies the planning and control department verbally to prepare the production schedule. Then, Harvey prepares the production schedule and a few copies of work orders. A copy of the work order is sent to the production department and another copy to the cost accounting department. In the production department, the supervisor creates move tickets and the material requisitions. These documents are sent to the various work centers. Work center employee collects the material needed for the production from the inventory department by showing the material requisition forms. When the product passes through all the work centers, the supervisor signs and collects the move tickets at the end of the last tasks. Then, sends the finished products to the warehouse. The storekeeper receives the material requistion forms and releases the materials to the production. He then updates the inventory records. If the inventory of raw material falls to reorder level, he prepares a purchase order and sends it directly to the respective suppliers. Required: b. Analyze the applicable internal control procedure(s) that would best prevent or detect the following problems: i. A production order was initiated for a product that was already overstocked in the company's warehouse. ii. A production employee stole items of work-in-process inventory. iii. A production employee entered a materials requisition form into the system in order to steal RM500 worth of parts from the raw materials storeroom. iv. A production worker entering job-ime data on an online terminal mistakenly entered 2,000 instead of 200 in the "quantity-completed" field. V. A production worker entering job-time data on an online terminal mistakenly posted the completion of operation 562 to production order 5,769 instead of production order 5,796. 145 made

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To prevent or detect the mentioned problems in MOZZA Taste Companys production cycle the following internal control procedures can be implemented i A production order was initiated for a product that ... View the full answer