Aspects Of The Origin Of Ma

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Aspects of the origin of MA

Literature on management accounting origin split in to two completely different categories. One that explains the development through what is called economic approach and the second through non-economic approach.

Economic approach

First signs of management accounting emerged as tool of cost control in early 19th century. This is when many businesses were simply made up of a group of people who specialised in certain individual areas. Production and supply of raw materials was completely separate at that time. These small businesses were therefore easy and straight forward to manage. The manufacturer would simply determine how much would materials cost and add the cost of work, which is generally evaluating the time that it takes to produce a certain good and set a monetary value. A dramatic wind of change to this was seen during the Industrial Revolution. Businesses became bigger and more complex. Perfect examples could be such as cotton textile factories in England or cotton mills in United States of America. Now instead of individual craftsmen, businesses became big hierarchical enterprises. According to Johnson and Kaplan (1987) this was the emerging point of modern management accounting.
Further advancement was noticed in the 19th century: “The emergence and rapid growth of railways in the mid-nineteenth century was another major driving force in the development of management accounting systems. New measures, such as cost per ton per mile,
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