Rift Valley University Burayyu Campus

Masters of Business Administration

Article Review on: Cost and Management Accounting

Practices: A Survey of Manufacturing Companies

Author: Ali UYAR

Reviewed by: Meseret Gobena Gecho
ID: RVBMBAR/098/18

Submitted To: Dr. Yonas

Submitted Date: 3/2/2019
Contents
1. Problem statement and Purpose of the study ...................................... 3
2. Objectives and Contributions of the study ......................................... 3
3. Methods and Analysis .................................................................. 3
4. Findings .................................................................................. 3
5. Strength and weakness of the study ................................................. 4
5.1 Strength ............................................................................... 4
5.2 Weakness.............................................................................. 4
6. Conclusion............................................................................... 4
6.1 Policy Recommendations........................................................... 4
 1. Problem statement and Purpose of the study
The purpose of this study is to explore cost and management accounting
practices utilized by manufacturing companies operating in Istanbul, Turkey.
There are some published papers on cost and management accounting practices
in Turkish national scientific journals of accounting, and economics and
administrative sciences, there are not at all publications in international journals.
This paper aims to fill in this gap.

2. Objectives and Contributions of the study

The objective of this study is to explore cost and management accounting
practices utilized by manufacturing companies operating in Istanbul, Turkey.
The paper is expected to contribute to the existing literature about the subject,
especially in developing markets.

3. Methods and Analysis

The data for this study was obtained by means of a survey questionnaire
conducted face-to-face with 61 randomly chosen manufacturing companies in
Istanbul from various industries. The questionnaire includes multiple choice,
open-ended, and Likert scale questions. Survey and questionnaire are the most
common techniques for collecting quantitative data. So they used quantitative
data collection method. The paper analysis and interprets the results using
methods: Product costing methods, Difficulties faced in product costing,
Overhead allocation bases used to calculate product costs, Application of costing
information, The ratio of overhead cost to total cost, The reasons for the
increased interest in cost accounting, and Perceived importance of management
accounting practices

4. Findings
The major findings of the study are as follows: the most widely used product
costing method is job costing; the complexity in production poses as the highest
ranking difficulty in product costing; the most widely used three overhead
allocation bases are prime costs, units produced, and direct labor cost. The most
important three management accounting practices are budgeting, planning and
control, and cost-volume-profit analysis. The findings indicate that companies
perceive traditional management accounting tools still important. However,
new management accounting practices such as strategic planning, and transfer
pricing are perceived less important than traditional ones. Therefore, they need
to improve themselves in this aspect.

5. Strength and weakness of the study

5.1 Strength
They used tested the result using many analyzing methods with well known data
collection techniques.
5.2 Weakness
Since the sample consists mostly of small and medium-sized enterprises, they
may not reflect the applications of large companies completely. The results are
confined to the manufacturing companies and should not be generalized to the
other sectors.

6. Conclusion
The survey revealed the general cost and management accounting practices of
Turkish manufacturing companies operating in Istanbul. The findings are
expected to contribute to the existing literature about the subject, especially in
developing markets.
6.1 Policy Recommendations
For future research, a countrywide and more comprehensive survey could be
conducted with the participation of more companies from distinct industries.
Moreover, case studies can be conducted to make more in-depth analysis about
cost and management accounting practices.