Technology And The Accounting Profession

Topics: Work order, Cost accounting, Costs Pages: 7 (1140 words) Published: April 19, 2015

Assignment from the Reading
Case Analyses (The Dinteman Company)
The Dinteman Company The Dinteman Company is an industrial machinery and equipment manufacturer with several production departments. The company employs automated and heavy equipment in its production departments. Consequently, Dinteman has a large repair and maintenance department (R&M department) for servicing this equipment. The assistant controller has proposed that a formal work order system be implemented for the R&M department. With the new system, the production departments will submit a service request to the R&M department for the repairs and/or maintenance to be completed, including a suggested time for having the work done. The supervisor of the R&M department will prepare a cost estimate on the service request for the work required (labor and materials) and estimate the amount of time for completing the work on the service request. The R&M supervisor will return the request to the production department that initiated the request. Once the production department approves the work by returning a copy of the service request, the R&M supervisor will prepare a repair and maintenance work order and schedule the job. This work order provides the repair worker with the details of the work to be done and is used to record the actual repair and maintenance hours worked and the materials and supplies used. Production departments will be charged for actual labor hours worked at a predetermined standard rate for the type of work required. The parts and supplies used will be charged to the production departments at cost. The assistant controller believes that only two documents will be required in this new system—a Repair/Maintenance Service Request initiated by the production departments and a Repair/Maintenance Work Order initiated by the R&M department.

Data Items to be incorporated into the work order
There are four main items that should be included on a repair and maintenance work order. They are start and finish dates, job identification, labor data, and materials and supplies data. The job identification should explain what department the job is to be done in, if it is a machine or work station, and the basic description of the job. Start and finish dates should include both actual and estimated dates. If the dates do not match up close enough there should be an explanation why or what happened. Materials and supplies data should give actual and estimated costs of the materials and supplies used in the repair or maintenance. Labor data should include the amount of people on the job, the cost of each of their hours, and the hours worked. The R&M department and production department should include on the work order, date requested, repair or maintenance item,suggested time maintenance or repair can be performed, estimated cost of repair or maintenance to include materials and labor, estimate labor time to complete work, actual costs and actual labor hours. As well as a place for R&M department and supervisor, and production personnel to sign for their part in the process and completion of initiating the work order.

Work order requirement and distribution
Dinteman Company should have four copies of the work order. The first step is for someone to notice that something is wrong. An order should be filled out for the R and M Department to come out and write an estimate. The second step is for the R and M Department to write a complete work order form. The first copy will be given to the Accounting Department on completion of the job. The second copy will be filed with the R and M Department upon completion. A third copy will be with the R and M Department. This copy will sit in the scheduled jobs and then it will be stapled to the second copy and filed with it. The...
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