An investigation on the extent of implementation of responsibility accounting among laboratory chemical trading firms in Cebu City

This study highlighted the management efficiency in controlling business operations through the implementation of responsibility accounting system. The study aimed in identifying the responsibility centers adopted and determining the extent of the implementation of responsibility accounting among the laboratory chemical trading firms in Cebu City. It endeavored further to describe the profile of the company as to size, years of operation and the form of ownership. It seek further to analyze the performance evaluation of management with respect to the impact of responsibility accounting system to overall company goals and to the individual responsibility center heads and to translate these goals/expectations of management into specific responsibility accounting system objectives. There were 35 laboratory chemical trading firms in Cebu City and 32 firms served as respondents of the study. The company profile was described from the data gathered in terms of frequency distribution and proportion or percentages. To analyze and determine the extent of implementation of responsibility accounting, the weighted mean for all the issues, measured in a five-point Likert scale, per center were determined. The analysis revealed that the rationale behind responsibility accounting among the firms under study is management responsibility wherein managers are held accountable for their actions in planning and controlling resources assigned to them and are evaluated with the use of financial and non-financial measurement. The preparation of monthly reports on comparative actual and budgeted results with variance analysis and submission of these reports to all responsibility center managers. The designing of responsibility accounting system structures was to identify the responsibility centers as: units responsible for investment, units responsible for revenues and expenses, units responsible for revenues only and units responsible for expenses only and to identify the responsibility center whose expenses were subject to allocation. The results of the study revealed that the company profile of the firms under study belong to the small size classification. These firms were being dominated by the corporate form of ownership with an average existence of thirteen (13) years. Based on the research findings, responsibility accounting have been adopted by all the firms under study which totaled thirty-two (32) respondents. However, it was found out that there were six (6) firms that implemented all the four centers. Twentyfour (24) firms practiced cost center and twenty- five (25) firms adopted the revenue and profit centers. Only twelve (12) firms implemented the investment center. Regarding the extent of implementation of responsibility accounting, it was generally an extensive one for all the centers. The implementation was comprehensive but not complete. Results further revealed that it was not absolutely necessary to have the four types of responsibility centers, although preferably, yes. Responsibility accounting system can work with only cost center , revenue center or profit center or investment center as responsibility center but the exercise was limited. The system can work without cost allocation but it was better to allocate service cost. It can be implemented with the budgeting system, accounting system and the performance evaluation system. To realize the maximum benefit of responsibility accounting an in-depth research be undertaken on the extent of implementation of the same responsibility center on specific segment/department of firms with the same kind of business