The impact of management accounting techniques on organizational decision making
| Format: Ms Word | 1-5 Chapters | Table of Content|
INSTANT PROJECT MATERIAL DOWNLOAD
Study Level: BTech, BSc, BEng, BA, HND, ND or NCE
Amount: ₦3,000.00
Abstract
This study, which investigated the impact of management accounting techniques on organizational decision-making, was conducted at five Abeokuta manufacturing companies.
A descriptive survey design was chosen for this study. Target selection was used to select his 200 employees from his five manufacturing companies in Ogun State. Dangote Cement, Flour Mills, CDK Integrated Industries, Cometstar Manufacturing Company Ltd., Apex Paint Limited. Therefore, 40 employees were selected from each manufacturing company.
The study was conducted using a mixed methods approach (defined in ‘study design’) and analyzes were performed using the Statistical Package for the Social Sciences (SPSS) and coding/theme. Using SPSS.
The results of this study show that there is a significant correlation between cash flow analysis and business decision making. The results also demonstrate an important link between marginal costing and organizational decision-making. Finally, the results show no significant relationship between standard costing and organizational decision-making.
This study concludes that management accounting techniques have a significant impact on organizational decision-making, and this study recommends here. Management accounting methods should always be used. A manufacturing organization operating in Nigeria must apply management accounting techniques to make effective business decisions. Organizational decisions should be guided by the results of an effective management accounting process.
chapter One
Foreword
1.1 Research background
Management accounting techniques are essential for achieving the goals set in an organization or business and for making decisions. Corporate decision-making is unguided, as management accounting techniques provide appropriate guidance for managerial decision-making at all levels. It’s a well-known fact that technology changes over time. This is largely because companies themselves and the societies in which they operate change as well. What was considered good management practice a year ago may be viewed as ineffective in decision-making tomorrow.
Businesses thrive on quality decisions. Accounting is an important source of information in management accounting. Management accounting techniques are designed to help organizations improve by making day-to-day operational decisions, strategic decisions, and reporting the results of those operations to management.
All organizations, whether private or public, set goals. Achieving these goals depends on how effectively an organization’s available resources are used for their intended purpose. Also, the deployment of these resources to the appropriate areas agreed upon within the organization depends on the information available to the organization’s administrators. The role of management accounting is to provide valuable information about segments and the organization as a whole, to make long-term strategic decisions, and to ensure the efficiency of each unit.
The problems organizations face in making decisions stem from the lack of a management accounting department within the organization and the unskilled nature of the accounting staff.
Most organizations are determined to make strategic decisions without prior analysis using management accounting techniques. To ensure capacity and productivity at any facility, we highly recommend using a management accounting department to enable proper management and cost control.
Also, changing external business environment has resulted in further developments in the tools and techniques used for management accounting. There have been issues arising from decision making in organizations that is why the current techniques used by the management in making their decisions such as; make or buy, cost-volume-profit analysis, just-in-time, inventory management, budgeting, variance analysis, activity based costing, linear programming, relevant cost, incremental cost and opportunity cost are the techniques to be discussed during the cause of the project.
The chartered institute of management accounting (CIMA) defines management accounting as the sourcing, analysis, communication and use of decision-relevant financial and non-financial information to generate and preserve value for organizations.
Also, according to the Institute of Management Accountants (IMA), Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy
The Management Accounting Practices Committee (MAPC) of the National Accounting Association (NAA) of the United States, defined Management Accounting as “the process of identification, measurement, accumulation, analysis, preparation, interpretation and communication of financial information used by management to plan, evaluate, and control within an organization mad to ensure appropriate use of accountability for its resources.
In summary, management accounting is the use of accounting information, financial and non-financial in the decision making of an organization to keep the values and also help put the organization in order. Decision making can be easily defined as choosing one course of action among many alternatives. No decision is required if there is no alternative. The basic assumption is that the best decisions are the ones that generate the most revenue or the least cost. A manager’s job with the help of a management accountant is to find the best alternative. From a descriptive model of the basic characteristics and assumptions of the corporate management accounting perspective, it is easy to understand that decision-making (strategic, tactical, short-term or long-term) is the focus of management accounting. There are many management accounting techniques that can improve organizational decision making and these are: Cost/volume/profit analysis, cash flow analysis, marginal costing, variance costing, activity-based costing, opportunity analysis, target costing, just-in-time, percentage costing, linear programming, inventory management, variance analysis Such. I’m going to focus on three techniques. Cash flow analysis, activity-based costing, and target costing.
1.2 Problem Description
Management accounting techniques aim to provide information that helps managers plan and manage their organization’s resources. Companies that lack proper management accounting skills may be unable to make the right decisions necessary for their long-term viability. Most organizations are determined to make strategic decisions without prior analysis using management accounting techniques. This research tends to find solutions to problems affecting management accounting techniques and decision-making in manufacturing enterprises. Consider briefly the following issues:
- Effectiveness of cash flow analysis as a management decision tool.
- Management’s Ability to Use Limitations to Make Effective Decisions
- Cost accounting method as a management accounting method tool
A non-conclusive decision as a result of applying standard costing methods
1.3 Purpose of the survey
The primary purpose of this study is to determine the impact of management accounting techniques on organizational decision-making. There are specific objectives of the study, including:
I. Investigating the impact of cash flow analysis on organizational decision-making.
II. Determining the Impact of Marginal Costing on Organizational Decision Making.
Examine the impact of standard costing on organizational decision-making. 1.4 Research question
A research question is a question that comes up frequently in a course. Research questions are intended to generate possible answers to various aspects of the research question and should be clearly formulated to serve as a guide for identifying, collecting and analyzing relevant data. To achieve the objectives of this research study, this research seeks to provide answers to the following research questions in order to arrive at reasonable conclusions.
I. What impact does cash flow analysis have on organizational decision-making?
II. How does marginal costing improve organizational decision making?
III. How does standard costing affect organizational decision-making?
1.5 Hypothetical opinion
To justify this research work, I formulate the following hypotheses to guide my findings.
Hypothesis 1
H0: There is no significant correlation between cash flow analysis and organizational decision making. H1:
There is an important relationship between cash flow analysis and organizational decision making.
Hypothesis 2
H0: There is no significant relationship between marginal costing and organizational decision making.
H1: There is an important relationship between marginal costing and organizational decision making.
Hypothesis 3
H0: There is no significant relationship between standard costing and organizational decision making.
H1: There is an important relationship between standard costing and organizational decision making. 1.6 Importance of research
Over time, research has shown that most organizations do not use management accounting techniques as a basis for decision making. This research aims to clarify the nature of management accounting techniques and how they can improve organizational decision-making when used in an organization. This study seeks to elucidate, through a clear definition, what a management accounting technique is, how it can be incorporated into an organization, and the need to create a department for it within an organization.
The researchers strongly believe that it would be generally beneficial for both accountants and manufacturing companies to assess several techniques that manufacturing company management uses in their decision-making processes.
1.7 Scope of investigation
This study focuses on the impact of management accounting techniques on organizational decision-making (a study of five manufacturing companies in Abeokuta, namely Dangote Cement, Flour Mills, CDK Integrated Industries, Cometstar Manufacturing Company Ltd. and Apex Paint Limited). ).
Additionally, the study evaluates several techniques that manufacturing company executives use in their decision-making processes. The study also aims to examine the underlying issues facing industries that use management accounting techniques as decision-making tools.
The investigation was limited to his five manufacturing companies in Abeokutaogun province. This is due to limitations such as accuracy, cost and time.
1.8 Working with variables
Y=f(x)
Where:
Y = dependent variable
X= independent variable
Where
ODM = Organizational Decision Making
X is decomposed into variables including:
CFA = Cash Flow Analysis
MC = marginal cost
SC=standard calculation
ODM= f(BC)…………Equation 1
ODM=f(MC)…………Formula 2
ODM=f(SC)…………Equation 3
Y(ODM)=α1+β1(BC)+μ……. Hypothesis 1
Y(ODM)=α2+β2(MC)+μ………Hypothesis 2
Y(ODM)=α3+β3(SC)+μ………. Hypothesis 3
For this reason,
ODM = α + β1BC + β2MC + β3SC + μ
Where
α = the value of y, where all values of the explanatory variables are zero intercepts
β = mean change in y associated with unit change in variable x
μ = error term
1.9 Definition of terms
This study aims to examine various concepts used in research work in order to make it understandable to non-professionals (accounting/financial).
Margin cost: Marginal costing is a technique that considers only variable costs when calculating the cost of a product.
decide: Decision-making is not an independent function of management. In fact, decision-making is intertwined with other functions such as planning, coordinating and managing. All of these functions have to make a decision. For example, management must first make important decisions about which of several strategies to pursue. Such decisions are often referred to as strategic decisions because they have long-term implications for the organization. Likewise; managers have to make a myriad of small tactical and operational decisions that are critical to the health of their organization.
Cash flow analysis: A cash flow analysis is an assessment of a company’s cash inflows and outflows from operating, financing, and investing activities. In other words, look at how the company makes money, where the money comes from, and what that means for the company’s overall value.
Standard cost: Standard calculations are preset for each unit, then actual costs are compared, and finally deviations are determined and appropriate actions taken.
Item billing: Management accounting is the acquisition, analysis, communication and use of financial and non-financial information relevant to decision-making to create and maintain value for an organization.
USE THIS MATERIALS AS A GUIDE FOR YOUR PERSONAL RESEARCH WORK (IF PROPERLY CITED)
PAY ₦3,000 HERE TO DOWNLOAD MATERIALS
Account Number: 0709546102
Access Bank: Savings
Account Name: Emmanuel Idorenyin Samuel.