THE UTILIZATION OF MANAGEMENT DIFFERENTIAL ACCOUNTING IN DECISION MAKING REGARDING FIXED ASSET INVESTMENT AT PDAM TIRTANADI, NORTH SUMATERA PROVINCE
Abstract
PDAM Tirtanadi in North Sumatera province is a provincial- owned utility company that supplies clean water for this province’s population. In terms of accomodating the increasing needs and demands of clean water, PDAM Tirtanadi is still facing challenges as there is still a long queue of new installation requests that which could not be processed yet. The purpose of this research is to explore more into the utilization of management accounting information in decision making regarding the company’s fixed asset investment and other related factors that contribute to the company’s inability to meet the demands of clean water from the population. This research is done in descriptive manner as a case study. The methods applied in gathering necessary data is through documentations and interviews. The result of the conducted research shows that the management of the company has indeed utilized differential accounting information in decision making for fixed asset investment, in which the company both produce clean water on their own and purchase bulk water to strive to keep up with the demands from the population. Other factors found that cause the challenges in meeting the existing demands of clean water from the population in this area is the limited supplies of raw water, the high level of loss water, the limited capacity of production, and the inability to provide water continuity.
Keywords: Management Accounting Information, Decision Making
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