Please use this identifier to cite or link to this item: https://hdl.handle.net/10321/1603
Title: Using material flow cost accounting to determine the impacts of packaging waste costs in alcoholic beverage production in an alcoholic beverage company in Durban
Authors: Tajelawi, Omolola Ayobamidele 
Issue Date: 2016
Abstract: 
A large number of manufacturing companies adopt the use of the traditional accounting method in their operations. This technique fails to reflect a detailed report of all material losses incurred in their production processes. Worthy of note, is that losses/waste are considered as inefficiencies in manufacturing operations and viewed as a costly venture to the sustainability of the company.

This research, therefore, through a case study analysis, examined the efficient/inefficient flow of resources in the production process of an alcoholic beverage company in the Durban metropolis. The study was carried out in order to determine the impact of packaging waste cost in an alcoholic beverage company using the material flow cost accounting technique. Measurements included the input of packaging materials against its output, while giving consideration to waste incurred as losses.

The Material Flow Cost Accounting (MFCA) technique, an environmental management accounting tool developed for measuring the flows and stocks of materials of a company and production process in both physical and monetary units, was used to measure the costs of waste on two production lines. MFCA was used to trace all material inputs and categorize them as product or non-product output. MFCA is used to classify the relevant material flows as cost collectors, thereby allocating the costs of the company’s production operations and flows.

Different packaging materials that constitute waste on the lines were analyzed using the mixed method approach, which includes observation, questionnaire administration, and analysis of six months production report. Two production lines were considered for sampling, and recommendations were given based on the data analyzed using the SPSS package.

The MFCA technique revealed that losses on both production lines were understated, and that, the bottling plant was losing a sizeable amount of monetary value of packaging materials to waste. The MFCA technique also revealed that the traditional costing technique is unable to provide adequate information managers require for strategic cost decision making.
MFCA is therefore recommended to assist managers improve production line efficiency and cost savings via accurate waste costing and reduction for corporate sustainability.
Description: 
Submitted in fulfillment of the requirements of the Master of Accounting degree, Durban University of Technology, Durban, South Africa, 2016.
URI: http://hdl.handle.net/10321/1603
DOI: https://doi.org/10.51415/10321/1603
Appears in Collections:Theses and dissertations (Accounting and Informatics)

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