Contigency theory, Managerial Accounting

Assignment Help:

CONTIGENCY THEORY

Some researchers have argued that the context in which budgetary control is used is as important as the style in which it is implemented and used. This is termed as the contingency theory. The contingency approach to management accounting is based on the assumption that there is no universally appropriate accounting system applicable to organizations in all circumstances. Rather contingency theory attempts to specific aspects of an accounting system that are associated with certain defined circumstances and demonstrate an appropriate matching.

Major factors recognized are:

Environmental factors like:

  • Its degree of predictability
  • The extent of competition faced in the market
  • The number of various product in the markets
  • The degree of hostility exhibited by competition

 

Organizational Structure Factor including:

  • Size of the organization
  • Interdependence of the parts or sub-units
  • The degree of decentralization
  • Availability of resources

 

Technological Factors such as:

  • The nature of the production process
  • The routineness or complexity of the production process
  • How well the relationship between inputs and outputs is understood
  • The amount of variety in each task that has to be performed

Related Discussions:- Contigency theory

Material control, MATERIAL CONTROL It is said that "any fool can sell"—...

MATERIAL CONTROL It is said that "any fool can sell"—it is buying at the right price that is more critical to the achievement of a satisfactory return on capital employed.  Buy

What is product life cycle, Product life cycle Every product has a life...

Product life cycle Every product has a life cycle. The life cycle of a product vary from months to various years. For example in the case of cameras photocopying machines etc.

Explain term contribution - contribution margin analysis, Contribution marg...

Contribution margin Analysis Contribution Contribution is the  difference between sales and variable cost or marginal cost of sales . if may also be defined as the excess

Willco Inc. manufactures electronic parts, Willco Inc. manufactures electro...

Willco Inc. manufactures electronic parts. They are analyzing their monthly maintenance costs to determine the best way to budget these costs in the future. They have collected the

Costs, Recommend whether marginal or absorption costing should be use for i...

Recommend whether marginal or absorption costing should be use for internal monthly reporting

Multiple regression, MULTIPLE REGRESSION The least square regression eq...

MULTIPLE REGRESSION The least square regression equation discussed above was based on the assumption that total cost was determined by only one activity based variable. However

Motives for conducting cash balances, In this section we have discussed the...

In this section we have discussed the motives for conducting cash balances. In addition, we have discussed cash deficit or surplus situation and how it can be contained by the use

Return on investment-residual income, Return on Investment and Residual Inc...

Return on Investment and Residual Income This is a traditional approach to performance measurement given by: ROI =     Income          Invested Capital               (m

What is the significance of performance budgeting, Significance of performa...

Significance of performance budgeting Performance budgeting will help the management of companies by introduction of management objective to improve performance. Further it wi

Explain the ratio analysis according to kosher, Explain the Ratio analysis ...

Explain the Ratio analysis according to kosher A ratio is the relation of the amount a to another b expressed as the ratio of a to b; a: b (a is to b) or a as simple fraction i

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd