Question 1
What manufacturing data is used by the managerial accounting module within ERP?
ERP integrates production planning, material management, and cost and management accounting which is very useful to managerial accounting. In cost and management accounting, activity-based costing is used to increase the accuracy of the product-cost information and to develop activity-based budgets.
The system links production planning’s bill of materials with material movement information that is available in the material management portion of the system. It permits the establishment of standards for material handling. The manufacturing data used by the managerial accounting module are direct material part numbers, production orders, number of units that will fit on a pallet, which in turn calculates standard direct cost and material handling costs.
Question 3
How does this data integration support managerial decision making?
Linking planning, materials handling and accounting gives additional support to managerial decision making, especially budgeting. Activity-based budgeting attempts to anticipate the demands on a process, such as materials handling, given the estimated production of various products in standard batch sizes. The system is able to estimate the quantity of the various direct materials and the number of pallet moves required to support the total budgeted production. This support results in process improvements, streamlined processes and increased efficiency in relation to managerial decision making.
References
Sumner, M 2005, Enterprise Resource Planning, Pearson Prentice Hall, Upper Saddle River, New Jersey.
