I.

Introduction

Microbusiness is defined as any type of business enterprise whose total assets is

below P 3,000,000 and employs less than 10 workers. (V.Abrugar, 2013). Some of the

microbusiness entities in the Philippines are catering or canteen business, furniture,

baking, coconut wine making and café business. It is part of the Micro, Small and

Medium Enterprises (MSMEs).

This study that the researcher have been investigating is important on our

economy. MSMEs serves as the backbone of the Philippine economy. According to NSO

(2008), there are 761,000 registered enterprises with 91.6% as microbusinesses. MSMEs

contributed 35.7% of the total sales and census value-added in the manufacturing

industry. Small businesses have more impact on Filipinos’ lives than larger businesses. It

gives job opportunities to about thirty percent (30 %) of the poor in the Philippines. (E.

Angara, 2012).

II. Body/Theme

Microbusinesses not only impact the livelihood of owners, they also lead to better

outcomes for their families, local communities, and entire regions, as well as the national

economy. Microbusinesses can provide opportunities for many individuals in society, but

they are of particular value; both actual and potential. (“AEO”, 2013, p. 15).

Ruane (2007) argued that like those in other countries, Small- scale businesses in

the Philippines make significant contributions to the economy’s development.

Data show Filipino SMEs to make up more than 99% of all businesses in the country, pro

vide more than two-
thirds of the country's employment, and is responsible for almost one-third of the country'

s income (Philippine Department of Trade and Industry, 2003). 

Microbusinesses continuously contribute to the income generation, development

of entrepreneurship and employment opportunities. It can be the pathway to the

innovation and development of new products. (E. Santos, 2012). With their dynamic and

productive characteristics, they are seen as crucial for the country’s growth and brings job

opportunities. (R. Aldaba, 2012).

Many small businesses can easily adapt and respond to the changing economic

climates and it is because they are often customer-oriented. Most of their customers will

remain loyal to them even in the middle of an economic crisis. Small businesses also

acquire less revenue than corporations, meaning they may have less to suffer during an

economic crisis.

III. Conclusion

It can therefore be conclude that microbusiness can be a vital factor not only in

the economy of the Philippines but also around the world. It has a direct impact on the

total number of country’s employment, income and development of entrepreneurship. It

can also adapt easily on the economic crisis.

I. Introduction

Raw materials are commodities, substance, chemical or material used in a

production process to form a product or good. Generally, raw materials like coconut,

wood and iron come from natural resources. It plays a major role in the production

process, contributing a great extent of success to the country’s economy.

Determining the effect of raw materials can help the business on how to cope up with

its unpredictable changes. Fluctuations in the price level of raw materials impacts the

success of a business. It can make the business profitable or unprofitable. The price

changes of raw materials can affect the economy since businesses contribute to the

success of the country.

II. Body/ Theme

As Johnson & Kaplan (1991, 3) mentioned, price changes of raw materials is a

huge challenge for management accounting. If the raw material prices increase or

decrease, reliability of management accounting is lowered. This makes it harder to take

correct actions as the numbers in management accounting cannot be trusted.

Fluctuations in the price level of raw materials impacts the success of a

business. It can make the business profitable or unprofitable. The business may change

their raw materials and it can affect the sales revenue. (J. Riley, 2009). Immediate fall of

commodity costs can increase profits but these profits can easily disappear when the

prices suddenly increase. (D. Ruther, 2012). The cost of raw materials stays as the top
 overall priority of the manufacturers, 51 percent as their first priority according to a

survey from Prime Advantage (2012).

III. Conclusion

Uncertainty of raw material prices affects every objective of management

accounting, which are supplying information for internal decision makers, facilitating

their decision making, motivating their actions and behavior in a given direction and

promoting efficiency of the organization. Immediate fall of raw materials costs can

increase profits but can disappear easily when the costs suddenly increase.