The Golf Club Company Makes Custom Golf Clubs

question 86

Essay

The Golf Club Company makes custom golf clubs.The manufacturing supervisor interviews people who have specialized manufacturing skills,and then informs payroll when an employee is hired.The employees use a time clock to record the hours they work.The employees are also required to keep a record of the time they spend working on each order.The supervisor approves all time cards.
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The accountant analyzes the job tickets and prepares a labor distribution summary.Payroll prepares the payroll register and paychecks.The supervisor distributes the paychecks to the employees.Payroll informs cash disbursement of the funds required to cover the entire payroll amount.The cash disbursements clerk ensures that there are adequate funds in the company's regular checking account to cover the payroll.
Describe at least three internal control weaknesses; for each weakness suggest an improvement to internal control.

Understand the impact of cash transactions on assets.

Comprehend how different types of transactions affect owner's equity.

Recognize how transactions impact liability accounts.

Understand the principle of double-entry bookkeeping.

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Definitions:

Manufacturing Overhead

All indirect costs associated with the manufacturing process, excluding direct material and direct labor costs.

Direct Materials

Raw materials that can be directly attributed to the manufacturing of a product.

Income Taxes

Taxes levied by governments on the income generated by businesses and individuals within their jurisdiction.

Formal Written Statement

A document that articulates official information or positions in a structured and official manner.