Ron Oliver C.

Tamang
BSA51KB2

REFLECTION PAPER
Chapter 7

The conversion cycle speaks about how particular sales into production of raw
materials into finish products. Depending on the type of product being
manufactured, a company will employ different procedure or conversion cycle. Now,
lets see how it works.
The conversion cycle consists of both physical and information activities related to
manufacturing products for sale. Meanwhile, the production happened when
customer orders from marketing. These inputs are used to set a production target
and prepare a production plan, which drives production activities. Purchase
requisitions for the raw materials needed to meet production objectives are sent to
the purchases procedure, which prepares purchase orders for vendors. Labor used
in production is transmitted to the payroll system for payroll processing.
Manufacturing costs associated with intermediate work-in-process and finished
goods are sent to the financial reporting system. Accordingly, there is batch
processing system thing. It is composed of production schedule, e bill of materials
(BOM) route sheet, work order, move ticket and materials requisition. This are
employed in baking products per batch so that it wouldnt be costly and time
consuming.
Overall, conversion cycle exists conceptually in all organizations, including those in
service and retail industries. The chapter was discussed as its objective of
examining problems associated with applying standard cost accounting techniques
in a highly automated environment