Level of Understanding Regarding Management Accounting Practices

among SMEs in San Juan, Batangas

suggested title: Understanding the Management Accounting Tools as

Perceived by the 3rd year Management Accounting Students of
CABEIHM-Pablo Borbon

Rationale
This paper evaluates the level of understanding regarding the management
accounting practices of MSMEs in San Juan, Batangas. Management accounting in
small and medium-sized enterprises (SMEs) has been an issue of growing interest in
the management accounting literature in recent years. Management Accounting
Practices (MAPs) provide various tools, techniques and valuable internal information
including for budgeting, profit planning and performance evaluation. This study shows
whether or not MSMEs have complete understanding and follow accounting principles.
The researchers came up with this concept in response to this situation.
Statement of the Problem
This study aims to assess the level of understanding concerning the
management accounting practices of MSMEs in San Juan, Batangas. Specifically, this
study focuses to answer the following questions:
1. What is the profile of the respondents in terms of:
1. form of business ownership;
2. nature of business;
3. years in operation; and
4. location?
2. In terms of management accounting, how much do medium-sized enterprises in
San Juan, Batangas practice it:
1. Costing tools 
2. Pricing tools
3. Budgeting tools
4. Profitability analysis tools; and
5.  Investment decision making?
3. Is there a significant difference in management accounting practices when
they're classified by profile?
4. What action plan might be suggested as a result of the findings?
Theoretical Framework
This study observed a dearth of a management accounting framework that is
tailor-made for small businesses. Management accounting is a practical science that
processes financial and nonfinancial information for the purposes of decision-making
and policy formulation as well as value creation (Kaplan & Atkinson, 1998; Horngren
et al., 2005). The application of management accounting is essential for the success
and growth of any business entity. Management accounting is particularly relevant
for SMEs operating in a dynamic economy as they promote efficiency and improve
the competitive edge (Abdel-Kader & Luther, 2006). MAPs are vital tools in
promoting development plans, controlling operations, formulating strategy, and
changing management as they act as the key information system in the decision-
making process (Mitchell & Reid, 2000). SMEs are globally recognized for their
contribution to economic growth and development (Kithae, et al., 2013).
The importance of management accounting knowledge to managers has been
reported by many researchers including Reid and Smith (2002). They state that firms
can gain access to financial and non-financial information to help improve their
current operations through the use of Management Accounting Practices (MAPs).
Similarly, Ahmad (2012) also reports that MAPs can enhance business profitability
through continuous waste reduction and effective resource utilization.

References:
https://jafas.org/articles/2021-7-3/7_FULL_TEXT.pdf
https://www.sciencedirect.com/science/article/pii/S1029313216300148
https://www.cimaglobal.com/Documents/Thought_leadership_docs/2009-12-16-
CIMA-Tools-and-Techniques.pdf
 RESPONSIBILITY ACCOUNTING IN THE HOSPITALITY INDUSTRY:
USAGE OF RESPONSIBILITY CENTERS FOR RESORTS
IN PUERTO GALERA AMIDST THE PANDEMIC
Rationale

      The effect of the pandemic for the past two years has been affecting a lot of

aspects of our society, one of which is the hospitality industry. Since travel and

relaxation are important to people, their needs of transport, accommodation, food, and

recreational activities depend on one of the sources of living in the Philippines - the

hospitality industry. As for Puerto Galera, in the province of Oriental Mindoro, which was

recognized by the United Nations Educational, Scientific and Cultural Organization

(UNESCO) as a Man and Biosphere Reserve in 1973, tourism is the lifeblood of the

said town. Unfortunately, because of the pandemic in the years 2020 and 2021, the

tourism sector of the town has been affected. Some of the hotels and resorts in Puerto

Galera either permanently close or lessen their employees because of low income due

to travel and tourism restrictions. With this, a study was to be conducted regarding how

resorts handle the different responsibilities within their business operations. 

Statement of the Problem

      This study aims to assess the Usage of Responsibility Centers for Resorts in

Puerto Galera Amidst the Pandemic. Specifically, the study sought to answer the

following questions:

1. What is the profile of the respondents in terms of:

A. Business Profile
 1.1 Name of Business

1.2 Type of Business

1.3 Number of years in operation

1.4 Number of business hours

1.5 Number of employees

1.6 Average monthly earnings

2. How are the resorts in Puerto Galera manage the following responsibility

centers within their business operations during the pandemic:

2.1 Cost Center

2.2 Discretionary Cost Center

2.3 Revenue Center

2.4 Profit Center

2.5 Investment Center

3. Is there a significant difference in the usage of responsibility centers of resorts

in Puerto Galera when grouped according to the use of responsibility centers?

4. Based on the findings of the study, what output may be proposed?

Theoretical Framework
 As firms' performance measuring processes become more complicated,

responsibility accounting has become an integral part of their accounting systems. The

process entails appointing a specialized individual or group to be in charge of

accounting for distinct company segments. These divisions are frequently organized as

responsibility centers, with appointed supervisors or managers responsible for the

center's performance as well as the authority to make choices that influence it.

Management control systems enable the organization's actions to be established,

implemented, monitored, and adjusted in order to achieve strategic objectives. The

responsibility centers concept and responsibility accounting both focus on monitoring

and changing actions based on financial results. This framework enables management

to receive valuable input on the organization's financial performance as well as highlight

any section activity that needs change.

When establishing accountability centers, companies must exercise caution.

Decision-making authority is delegated to each segment's unique management or

director in a responsibility accounting framework. The financial performance of that

segment or responsibility center will be used to assess the management or director. As

a result, it's critical to build a responsibility accounting framework that provides for an

effective and equitable evaluation of the responsibility center's financial success (and,

by default, the manager's performance) as well as the achievement of the organization's

strategic goals.

Cost Centers
 A cost center is a division of a company where a manager is solely responsible for

costs. The costs incurred and the product or services generated are linked directly in

these types of responsibility centers. Managers must understand this link and structure

it appropriately within the framework of responsibility accounting.

Discretionary Cost Centers

A discretionary cost center is similar to a cost center but for one difference. When

there isn't a well-defined relationship between the center's costs and its services or

products, it's called a discretionary cost center. Human resources and accounting

departments, for example, are two examples. Human resources departments frequently

create regulations that impact the entire company.

Revenue Centers

A revenue center is a division of a company where a manager is solely responsible

for revenue. A revenue center's objective is to produce revenue for the company, as the

name implies. The manager of a revenue center would concentrate on building certain

skill sets among the revenue center's personnel in order to achieve the aim of growing

revenues.

Profit Centers

A profit center is a part of an organization where a manager is in charge of both

revenue and costs. A profit center structure is the most complicated of the responsibility

centers so far since a manager must be well-versed in strategies to grow revenues,

 minimize expenses, and so enhance profits while simultaneously satisfying the

organization's strategic goals.

Investment Centers

It is critical for managers to invest in the company on a regular basis. Managers

must make investments that boost the business' value through improving customer

experience, growing customer loyalty, and, eventually, raising the company's worth. The

cost center, discretionary cost center, revenue center, and profit center structures all

have one flaw: they don't account for the investments made by the various responsibility

center managers. Investment centers, the final responsibility center, consider and

assesses the investments made by the responsibility center managers. The investment

center structure's mission is to ensure that segment managers select investments that

create value and help the company meet its strategic objectives.

An investment center is a division of an organization in which a manager is

responsible for profitability (revenues minus expenses) and the segment's invested

capital.

REFERENCES

Graybeal, P., Franklin, M., & Cooper, D. (2019, July 16). OpenStax, Principles of Accounting,

Volume 2: Managerial Accounting. OpenStax CNX. Retrieved March 6, 2022, from

https://opentextbc.ca/principlesofaccountingv2openstax/
 EVALUATING THE EFFECTIVENESS OF COST REDUCTION TECHNIQUES OF
MANUFACTURING FIRMS IN BATANGAS CITY
suggested title: Cost Reduction Techniques Utilized by Construction Firms in
Batangas City: An assessment
Statement of the Problem
This study aims to evaluate the effectiveness of cost reduction techniques of
manufacturing firms in Batangas City. Specifically, it sought to answer the following
questions;
1. What is the profile of the respondents in terms of;
1. Years of operation
2. Location
3. Production Capacity
4. Monthly Income
2. What are the cost reduction methods of manufacturing firms?
2.1. Target Costing (TC)
2.2 Activity-Based Costing (ABC)
2.3 Just-In-Time (JIT)
2.4 Enterprise Resource Planning (ERP)
2.5 Value Engineering (VE)
3. How cost-reduction techniques effective on reducing the following;
3.1 Direct Material Costs
3.2 Direct Labor Costs
3.3 Manufacturing Overhead Costs
4. Is there a significant difference in cost reduction techniques when grouped
according to profile?
5. Based on the findings, what output may be proposed?

Theoretical Framework

The theoretical framework is the structure that can hold or support a theory of a
research study. The theoretical framework that is presented here shows the different
theories and concepts that the researcher used in evaluating the effectiveness of cost
reduction techniques of manufacturing firms in Batangas City. It provides facts and
concepts that are relevant to the topic.

For the first variable which is cost reduction, the researcher will use the five main cost
reduction methods employed by businesses; Target Costing (TC), Activity-Based
Costing (ABC), Just-In-Time (JIT), Enterprise Resource Planning (ERP), Value
Engineering (VE). According to Ojha and Gautam (2008), Cost reduction is the real and
genuine savings in unit cost of manufactured products. It therefore, constantly striving to
 achieve genuine cost savings in the areas of production, distribution, sales, and
administration brought about by the elimination of wasteful and unnecessary elements
from the design of the product, as well as from the techniques and practices carried out
in connection therewith.

Moreover, the researcher used the three categories of product costs to determine the
effectiveness of cost reduction techniques employed by manufacturing firms. Product
costs or inventoriable costs are the direct costs that are incurred in manufacturing a
product. Product costs include; direct material, direct labor and factory overhead. 

References
https://www.mbaknol.com/operations-management/cost-reduction-program/
Murphy C. (2021). How Are Period Costs and Product Costs Different? Retrieved from.
https://www.investopedia.com/ask/answers/102714/what-are-differences-between-
period-costs-and-product-costs.asp
Sharma D. (2017). Application of Cost Reduction Tools in Manufacturing Organizations at
Pokhara. Retrieved from. https://www.nepjol.info/index.php/JJIS/article/view/19308
suggested title: Competitive Advantage of Casual Restaurants in Lipa City Using
Porter’s Generic Strategies

Statement of the Problem: 

This study aims to evaluate the effects of Porter’s generic strategies on the
performance of restaurants in Lipa City. 
Specifically, it sought to answer the following questions;
1. What is the profile of the respondents in terms of:
1. Position
2. Age
3. Years of Restaurant Existence
4. Estimates Monthly Income
2. What are Porter’s Generic Strategies?
1. Cost Leadership
2. Differentiation
3. Focus
1. Cost focus
2. Differentiation focus
3. Is there a significant difference in the effects of Porter’s Generic strategies on the
performance of restaurants when grouped according to profile?

4. Based on the findings, what output may be proposed?

Theoretical Framework
The theoretical framework demonstrates an understanding of theories and concepts
related to the effect of Porter’s generic strategies on the performance of restaurants in
Lipa City. The variable that will be used by the researchers is the Porters’ generic
strategies. 
A firm's relative position within its industry determines whether a firm's profitability is
above or below the industry average. The fundamental basis of above-average
profitability, in the long run, is a sustainable competitive advantage. There are two basic
types of competitive advantage a firm can possess: low cost or differentiation. The two
basic types of competitive advantage combined with the scope of activities for which a
firm seeks to achieve them, lead to three generic strategies for achieving above-
average performance in an industry: cost leadership, differentiation, and focus. The
focus strategy has two variants, cost focus and differentiation focus. (Michael
Porter,1985 in his book, entitled "Competitive Advantage: Creating and Sustaining
Superior Performance.")
Cost leadership is the ability to produce a product or service at a lower cost than
competitors. If your restaurant is able to provide the same quality food and service but
at a lower price, this gives you a competitive edge over other competitors. A differential
advantage is when a company has products or services that are different from similar
businesses. If this is the case with your restaurant, according to Porter, you should
make your good food or services more inviting and stand out from other
restaurants. Focus strategy is when a business aims at a few target niche markets
instead of trying to target everyone. 
References:
https://www.mindtools.com/pages/article/newSTR_82.htm
Porter, Michael E., "Competitive Advantage". 1985, Ch. 1, pp 11-15. The Free Press.
New York.
https://www.ifm.eng.cam.ac.uk/research/dstools/porters-generic-competitive-strategies/
https://www.forketers.com/restaurant-competitive-advantage/