Strategic Management Accounting Essay Example | Topics and Well Written Essays - 2000 words - 1

Strategic Management Accounting - Essay Example This point of view is well supported with both early (Solomons, 1952) and contemporary researches (Boyns and Edwards, 1997a). Needless to say, standard costing has come a long way before it became generally accepted. Originally, cost accounting systems were mainly concerned with variable costs, such as labour and raw materials expenditures. This trend reflected the nature of businesses of that time, which had their variable costs dominating over fixed costs. It was found that before the First World War standard costing system largely interacted with organizational structure and strategic decision making (Boyns and Edwards, 1997b). Still, no evidences were found that costing system had been used in eliminating wastes and inefficiencies. Moreover, costing practices at that time were limited only to basic industries, such as coal and iron. Later, in 1900-1950 cost accounting at large, and standard costing in particular expanded further in the UK. Although still being under a strict control at engineering (state policy prohibited profiteering in that sector), it developed into government departments and business generally. Standard costing was promoted with accountants connecting theory with practice and a considerable variation was found in perception of standard costing between different times and places of that period in Britain (Boyns and Edwards, 1997c). Therefore standard costing system was not still implemented widely throughout the industries in Britain. It began to grow in popularity as a rather simple and accurate way of improving internal efficiency of a business. Nevertheless, issues of considering fixed assets, especially, depreciation created ambiguities for users of standard costing. These difficulties were strengthened with the trend of fixed costs (depreciation, maintenance, tooling, production control , purchasing, storage, etc.) increasing in value and variable costs decreasing. Accounting historians indicate that the