This paper seeks to investigate and report on the management accounting practices in the British food and drinks industry.
The data are generated by a large‐scale postal questionnaire which was informed by preliminary interviews. Further interviews were carried out to aid interpretation of the responses. Descriptive statistics on the importance and frequency of use of individual practices provide the basis for discussion.
Direct costing is widely practised and important, by contrast with activity‐based costing and full absorption costing. Despite the limitations of conventional budgets, they remain a central management accounting “pillar” and are frequently used in “what if?” analyses. The balanced scorecard and other non‐financial performance measures are perceived to be important but never or rarely used by 40 per cent of companies. Product profitability analyses are frequently applied and, surprisingly, the profitability of supplying individual customers is frequently calculated by over 50 per cent of the population. Respondents were sceptical about sophisticated DCF investment appraisals.
Traditional management accounting is “alive and well” but there are indications of likely increased use of: information concerning the cost of quality; non‐financial measures relating to employees; and analyses of competitors' strengths and weaknesses. There is evidence of a gap between current textbooks and actual practices.
The survey provides a unique detailed examination of actual management accounting practices and an indication of future trends.
Abdel‐Kader, M. and Luther, R. (2006), "Management accounting practices in the British food and drinks industry", British Food Journal, Vol. 108 No. 5, pp. 336-357. https://doi.org/10.1108/00070700610661321Download as .RIS
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