The effect of budgeting and costing practices on the financial performance of small and medium restaurants in San Fernando City, Pampanga

• Main Authors: Borja, Missy Tayao, Españo, Christine Anne Liu, Orda, Kirsten Grace Daquial, Touzo, Lorraine Angeline Roy
• Format: text
• Language: English
• Published: Animo Repository 2023
• Subjects: Cost accounting; Small business; Accounting
• Online Access: https://animorepository.dlsu.edu.ph/etdb_acc/80; https://animorepository.dlsu.edu.ph/context/etdb_acc/article/1140/viewcontent/2023_Borja_Missy_FullText.pdf
• Institution: De La Salle University

The use of management accounting practices (MAPs) can enhance a business’s judgment in decision-making. Depending on the size of the enterprise and the industry of a business, they have to apply the appropriate practices in order to attain their corporate goals. In small and medium enterprises, the use of costing and budgeting practices is more frequent and given importance. Thus, the study’s general objective is to determine the effect of budgeting practices (Budgeting on Planning and Budgeting for Controlling Costs) and costing practices (Variable/Fixed Costing, Activity-based Costing, and Target Costing) on the financial performance, particularly the net income of small and medium restaurants in San Fernando City, Pampanga. This study used a quantitative-survey questionnaire in order to gather data that will determine the effect of the implemented practices of the restaurants. The data was collected from the managers in charge of finance and accounting of small and medium restaurants. Data analysis methods include descriptive statistics to investigate the use of budgeting and costing practices, and its effectiveness among the respondents. The study also utilized regression analysis as a statistical tool to determine whether there is a significant effect on the financial performance, particularly the net income of these companies. With these procedures, the researchers were able to achieve the objectives of the study. Thus, the results of the study show that management accounting practices, particularly budgeting and costing practices, have a significant effect on the net income of the seventeen (17) small and medium-sized restaurants in San Fernando City, Pampanga.