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Book > Accounting Information Systems (9th Edition) Chapter 4, Problem 7IC 6 Bookmarks Problem CUSTOM FABRICATIONS (STAND ALONE PC BASED ACCOUNTING SYSTEM) (Prepared by Will Richens an Catchpole, Lehigh University)

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Accounting Information Systems (9th Edition) Chapter 4, Problem 7IC | 6 Bookmarks Problem CUSTOM FABRICATIONS (STAND ALONE PC BASED ACCOUNTING SYSTEM) (Prepared by Will Richens an Catchpole, Lehi... gh University) USTOM FABRICATIONS (STAND ALONE PC BASED ACCOUNTING SYSTEM) (Prepared by Will Richens an Catchpole, Lehigh University) CUSTOM FABRICATIONS Inc., is a bicycle manufacturing firm founded in 2000 that currently employs 126 peop company produces custom bicycles in its factory located near Los Angeles, CA. Each bicycle is tailored to a ride a number of different measurements, including height, weight, inseam, and arm length. These measurements ar 30 professional bicycle shops around Southern California, which are certified to size CUSTOM FABRICATIONS accepting orders only through licensed dealers, CUSTOM FABRICATIONS ensures that each bike matches its r precisely. CUSTOM FABRICATIONS custom bikes are considered extremely high quality, and the company take using only the best components sourced from around the world. Accordingly, CUSTOM FABRICATIONS purchas cast of hundreds of suppliers, chosen for their commitment to quality and reliability. Demand for CUSTOM FABRICATIONS’ cycles has grown exponentially in recent years. The surge in demand w somewhat unexpected and the company’s factory has been operating at capacity for over a year. As a result, cu orders face a production backlog of approximately 5–6 weeks. The company’s operations have been further ham severe inefficiencies and control weaknesses attributed to its legacy accounting system. Your firm has been hire outside consultant to suggest improvements in the company’s accounting procedures. The following paragraphs the company’s revenue cycle. Revenue Cycle SALES ORDER SYSTEM. The sales order process begins when a licensed CUSTOM FABRICATIONS dealer fa completed customer order and measurement form to the sales department. When the fax is received, a sales representative calls the dealer to confirm the order details and generates a quote based on the complexity of the sales clerk then enters the measurements and quoted price into his PC terminal, which automatically generates order form. The clerk prints three hard copies of the sales order form. The first copy is sent to the billing departm the second is sent to the factory. The clerk files the third copy, along with the customer order in the sales departm open customer order file. The billing department clerk uses the first copy of the sales order to compute the final sales price and manually p two copies of the customer invoice. One copy of this invoice is sent to the customer, while the second is used by clerk to update the sales order journal and accounts receivable subsidiary from his terminal. At the end of each d clerk prints out a hard-copy summary of the AR ledger and the sales journal and forward them to the general led department. [Show More]

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