Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania
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Date
2021-07-06
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Journal of Finance and Accounting
Abstract
Sunflower is among the key cash crops in Tanzania, which contribute significantly to the country’s economy. As it is
the case for other crop subsectors, sunflower is also grown in abundance by smallholder farmers. Nevertheless, they had been
living in poverty throughout their careers in agriculture which on the other hand benefited the counterparties in the trading deals.
The unfair price offered to sunflower farmers was discovered in this study to be a misfortune in their investments. The
conventional average farm-gate price of TZS. 622.449/Kg was found to be out of the price ranges that were backed by traditional
cost accounting system, leaving farmers making losses of minimum TZS. 99.889/Kg. This study was conducted in Singida
Region, Tanzania where a sample of 206 household farmers was used to obtain primary data on activity costs while the secondary
data concerning the conventional price were obtained from the Districts’ sales reports and farmers’ records. Inferential statistics
with one-sample test model was used alongside the IBM SPSS 26.0 statistical package in the quantitative data analysis. It was
recommended, further studies to be conducted to explore more about the production cost that is backed by the activity-based
costing (ABC) system, as it is more effective in assigning overheads to cost object than the traditional costing.
Description
Keywords
Smallholder Farmers, Sunflower, Farm-Gate Price Range, Conventional Price, Traditional Cost Accounting, Activity-Based Costing (ABC)