Stage 2

Madam lectures

 So when the people know how to control cost and how to determine the product, how we
can plan?
 Stage 2 is the beginning of industry revolution
 Before industry revolution, the products were produced based on manufacturer whre there
was no actual amount and products were produced in bucks of quantity.
 So in stage 2, they try to plan and decide on how many products should be produced.
 Especially for company that produced a variety of products.
 They have to decide on when to produce the products and the quantity of the products.
 That’s why they have to plan and the same time to control the production.

From articles

 Around 1950s and 1960s is mainly focusing on provision of information for planning and
control purpose.
 IFAC stated that stage 2 is considered as Management activity but it in staff role where staff
of the company will support the management through the use of technologies to be applied
for decision making, analysis and responsibility
 As part of Management control system, MA tended to be reactive in identifying problems
and took action but only when there is problem in following the business plan.

Research orientation and Data

 Studies report shows the Use of various management accounting techniques on different
countires has been a tradition
 A significant body of empirical research has been published in the field of management
accounting practices.
 Examples of researce, Chenhall and Langfield-Smith (1998), Ghosh and Chan (1997),
Guilding, Lamminmaki, and Drury, (1998), Luther and Longden (2001), Wijewardena and
Zoysa (1999), Mendoza and Bescos (2002), Yohikawa (1994) and Drury et al. (1993).
 However it differed in looking at at a broad set of management accounting practices like
budgeting, performance evaluation and costing and decision making compared to IFAC
 A postal questionare was the main source of empirical data
 Companies that choosen for research samples are:
1. Manufacture of food and beverage products
2. Employment of 30 people
3. Active and independent company
 MA in 650 companies were asked to state the frequency of using 38 Management
accounting practices (MAPS) by using 5 point liker type scale ( 1-5) (where from never use to
very often)
 Completed questionares received from 121 companies
 But the questionares has it’s limitation but can be overcomed with, each MAP must be
briefly explained by the companies.
 Respondednts also were asked to rate not important moderate important and important for
each technique.
 The 38 MAPS which has been derived from the literature relate to costing system budgeting
permormance evaluation information for decision making and strategic analysis.