With the information provided by the accounting system, managers will choose the optimal options to help the enterprise achieve its goals. According to Le Thi Huong (2017), the decision-making function requires managers to choose the most appropriate solution among the proposed solutions. With the planning function, managers need to develop strategic goals for the enterprise and outline specific steps to achieve those goals. With the implementation function, managers need to decide how to most appropriately use the enterprise's resources to achieve the set plans. With the inspection and evaluation function, managers need to compare the implementation report with the planning figures to ensure that the departments in the enterprise properly implement the set goals.
2.2. Basic theory
2.2.1. Random theory
The random theory is also known as the uncertainty theory. When approaching the randomness of the cost accounting system, it must be based on the assumption that there is no general cost accounting system that can be applied to all organizations in all cases. The random theory shows that the specific features of the appropriate cost accounting system will depend on specific circumstances, the effectiveness of the cost accounting system depends on internal and external factors of the enterprise, showing that the business environment, strategy, organizational structure as well as culture will affect the decision making in the enterprise. Business strategy factors, legal regulations, qualifications of enterprise accounting staff, production scale, production form are all affected by the random theory, in the stone mining industry, it is affected by the regulations of the State, depending on the resources, quality and output of exploitation, so enterprises always set out short-term and long-term strategies to be able to survive and develop.
2.2.2. Agency theory
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The content of agency theory includes the relationships between managers and investors, between top managers and lower levels, and between managers and those who directly use resources. In a business, there is always a relationship between the business owner and the operator, agreed upon through a contract.
To determine the benefits between the two parties, in order to achieve the goals, business owners and managers must use information from KTQTCP on planning, budgeting, and resource use. Factors such as awareness of KTQTCP, accounting staff qualifications will affect the need to use KTQTCP information of leaders, managers, and business owners.
2.2.3. Theory of benefit and cost relationship
When carrying out a project or making a business decision, it is necessary to compare the benefits received and the costs incurred from that decision, to calculate the total costs incurred, and to always ensure that the benefits must always be greater than the costs incurred. Managers must always adhere to this theory to ensure maximum benefits for the enterprise. Each enterprise will have different information needs, and the information of KTQTCP in applying this theory provided to managers must ensure the implementation of the common goals of the enterprise.
2.2.4. Legal theory
According to Elkington, J. (1997), legitimacy theory holds that an organization's operations must follow the values or social norms in which it operates. Failure by organizations to comply with social values or norms can lead to difficulties for that organization in gaining community support to continue operating. Enterprises must comply with legal regulations related to their industry and their responsibilities to society. Enterprises are subject to management at all levels from the Government to the local level. Based on legitimacy theory to apply to the enterprise's business management. Legal regulations and environmental cost control factors are greatly influenced by legitimacy theory and state supervision related to environmental issues such as emissions, waste, and noise. In the field of mineral exploitation, there are many serious impacts on environmental resources, and it is always an industry under close supervision from state agencies.
2.2.5. Stakeholder theory
Freedman, M. (1993), this theory about organizational management and ethics in business. The content refers to values, ethics in organizational management. The theory states that in the process of formation and development of enterprises,
closely related to relationships with customer resources, competitors, employees, and government agencies. Therefore, enterprises must create a balance in all of these relationships. Managers are responsible for intervening, resolving, and neutralizing conflicts from these relationships. In the stone mining industry, the relationships between parties are related to the stone mining process, the specificity of the business, related legal issues, the level of competition, and customer resources.
2.3. Characteristics of stone mining enterprises in Binh Duong
2.3.1. Specifications and uses of each type of construction stone in Binh Duong
The popular types of finished stone currently produced and supplied by stone mining enterprises in the Binh Duong market include: 1x2 stone, 0x4 stone, 4x6 stone, screened stone, dust stone, and boulder stone.
Stone 1x2: specifications from 10mm x 28mm, 10mm x 25mm, or 10mm x 20mm. Used in mixing and producing hot asphalt concrete (asphalt road paving), fresh concrete (cement concrete road paving, pouring screens, reinforced concrete columns in civil construction, pouring concrete in precast concrete structures).
Stone 0x4: specifications from 0mm to 40mm. Used in construction of lower foundation, increasing the hardness of the ground surface to prepare road pavement, make house foundation.
4x6 stone: size from 50mm to 70mm. Same uses as 0x4 stone, but is constructed before 0x4 stone.
Screened gravel: specifications from 5mm to 10mm. Used in combination with 1x2 stone in the production of hot asphalt concrete.
Crushed stone dust: this is a by-product with specifications from 0mm to 5mm. Used in factories producing fresh concrete, producing unburnt bricks, or screened and washed to make artificial sand.
Boulders: from 100mm and up, including raw boulders (only blasted and crushed – non-standard size) and machine-ground boulders (standard size 100mm to 400mm). Used to build canal banks, embankments, or foundations.
2.3.2. Process of mining, producing and trading construction stone in Binh Duong
Smash
raw stone
2.3.2.1. Mining process
Topsoil stripping
Clearing minefield
Mine drilling
Raw stone hoe
Loading explosives, breaking rocks
Transport to crushing and screening machine
Deliver to customer
Import and export of boulder stone
Diagram 2.1: Raw stone mining process
Source: AHP Eastern Minerals Joint Stock Company
Step 1: Peeling off the top layer, also known as peeling off the topsoil, at the mine (mining pit) to start the stone mining process, the company uses excavating equipment to peel off the topsoil to the rock layer below. This soil is excavated onto dump trucks to transport to make internal roads, embankments surrounding the mine boundary to reduce the danger of blasting to break rocks, and reduce dust to the surrounding environment during production.
Step 2: Clear the ground, when reaching the stone surface, the construction team will clear the ground and drill holes.
Step 3: Drilling blast holes, the blast holes are drilled with hydraulic compressors and drilled according to the diagram. The size of the borehole and the depth of the borehole are carried out in accordance with the drilling passport approved by the mine's executive director. After drilling is completed, the blasting technical team will conduct acceptance of the boreholes. There are many sizes of boreholes, currently there are 2 basic types of drilling commonly applied by stone mining enterprises in Binh Duong: 105mm diameter holes used for surface blasting of the drilling site, and 32mm diameter holes used for extracting (small blasting) large rocks that cannot be broken. According to the assessment, this is an extremely important stage, related to the efficiency of rock blasting and future mining costs.
Step 4: Loading explosives, breaking rocks, also known as the loading phase. Based on the borehole acceptance report, prepare a request for explosives supply and submit it to the State agency for approval, transfer the file to the explosives supply company (currently in Binh Duong, there are 2 explosives supply companies: National Defense Industrial Technical Economic Corporation, and the Branch of Nam Bo Mining Chemical Industry One Member Limited Liability Company - Micco in Binh Duong). Because this is a special type of material, explosives must be supplied on the correct date and exploded on the correct time according to the approved decision. The blasting technical team will conduct acceptance of the quantity and type of explosives at the drilling site, and proceed to load explosives into the boreholes. After completing the work of loading explosives at the blasting site, ensuring technical safety, and on the approved blasting time, proceed to blast and break rocks. The technical team is responsible for re-checking the entire minefield, checking and ensuring that there are no unexploded mine holes left after the explosion.
Step 5: Crushing and processing the raw rock after blasting. After everything is completed, the company proceeds to send the rock hammer truck into the blasting yard to break the raw rock. The rock hammer truck only breaks up the raw rocks of moderate size, the rocks that are too big must be drilled and blasted again, for this reason, the calculation of drilling holes and processing explosive materials is extremely important, otherwise it will be a waste, increasing the cost for the company.
Step 6: Pick up raw stone. After the raw stone has been crushed and processed. The excavator will pick up the raw stone and load it onto a dump truck to transport it to the weighing station to weigh the input raw stone, then transport it to the stone crushing and screening machine, or sell it directly to customers. The quarries are currently determining the two units of measurement: tons and cubic meters. The accountant enters the input raw stone into the warehouse, records the cost price, and simultaneously exports the cost price and revenue from selling the raw stone directly to customers (if any).
2.3.2.2. Production and business process
Transporting raw stone to the stone crusher
Crushing and screening finished stone
Import finished stone
Export to record cost of revenue
Hoeing and shoveling finished stone to deliver to customers
Reserve
Diagram 2.2: Production and trading process of finished stone
Source: AHP Eastern Minerals Joint Stock Company
Step 1: After the dump truck transports the raw stone to the crusher, each crusher will produce 2 or more products. The volume of finished stone in the warehouse is determined from the input volume of raw stone transported by the dump truck multiplied by the output ratio of finished stone of each crusher. The accountant will import the finished stone and calculate the cost according to the coefficient method. The data related to the volume of raw stone and finished stone produced will be used to report to the authorities, and is the basis for calculating costs: resource tax, environmental protection fee and allocation of mineral exploitation rights.
Step 2: After passing through the crushing and screening machine, the finished stone will be gathered at the storage yards waiting to be exported to customers.
Step 3: Based on the customer's order and the number of dump trucks registered to receive the goods, the warehouse keeper will deliver the finished ice according to the customer's request form. The output ice volume must also go through the weighing station for control.
Step 4: Accounting based on the order, warehouse weight slip, warehouse accounting records cost of goods, issues invoices to record revenue.
2.3.3. Cost characteristics in the construction stone production industry in Binh Duong
Types of costs incurred in stone mining enterprises include: main raw material costs, direct labor costs, general production costs, sales costs, business management costs, financial costs, and interest costs.
a. Main raw material cost: is the cost of explosives. Accounting records into account 621, documents include: sales contract, explosives supply request form, explosives handover acceptance report, value added invoices of 2 explosives supply companies.
How to control, the enterprise evaluates the effectiveness of using explosives in drilling with diameter of 105mm and diameter of 32mm, and on the volume of raw rock in stock.
Data to be prepared: Drilling diagram, total meters of drilling, total tons of raw rock, total amount of explosives used.
How to calculate explosives norms:
Mass (cost) of explosives / total meter (cost) of drilling diameter 105mm Mass (cost) of explosives / total number of holes (cost) of drilling diameter 32mm Mass (cost) of explosives / total mass of raw stone in stock
Currently, the average consumption rate of explosives is 4kg/meter of 105mm drilling and 0.2kg/number of 32mm drilling holes. For the rate based on imported raw rock, in addition to monitoring each blasting site, enterprises also evaluate by year, enterprises self-evaluate and monitor and compare between blasting times to have the most effective blasting plan for their own enterprises.
b. Direct labor costs: wages and salary deductions related to direct workers including: workers clearing mine drilling sites, workers drilling mine holes, workers performing blasting, workers operating hammer trucks, excavators, dump trucks transporting raw stone to the crushing and screening machine, workers operating the stone crushing and screening machine. Accounting records into account 622.
Direct labor wages are currently paid in three ways: First, based on the volume of raw stone mined. Second, paid on a time-based basis. Third, paid at a minimum time-based basis and based on the volume of raw stone mined.
c. General production costs: Accounting records into account 627, including costs: salary costs and salary deductions: machinery and equipment repair department, workshop management department, depreciation costs of fixed assets serving production.
production services, fuel costs for production machinery and equipment; allocation: costs of tools and equipment, repair of production machinery and equipment, costs of surveying, measuring, mapping the current status of the mine, costs of environmental restoration, annual land rent, costs of site clearance compensation; production electricity costs, resource tax, environmental protection fees, and costs of outsourced services for production.
d. Selling expenses: salary expenses and salary deductions of the sales department, depreciation of fixed assets serving the sales department, advertising expenses, vehicle rental expenses to transport finished stone to customers. Accounting records in account 641.
e. Enterprise management costs: salary costs and deductions based on salaries of enterprise management departments, depreciation costs of fixed assets serving the management department, repair costs of machinery and equipment, tools, stationery, electricity and water bills for the office department... are accounted for in account 642.
f. Financial expenses and interest expenses: Financial expenses are fees and charges related to banks, interest expenses are the interest payable by the enterprise, recorded in account 635.
2.4. General concept of factors affecting cost management accounting at stone mining enterprises in Binh Duong
Inheriting 6 factors affecting the work of KTQTCP at enterprises exploiting, processing and trading construction stone in the Southeast provinces from the study of Nguyen Thi Duc Loan (2019), along with identifying gaps in previous studies, the author develops, proposes and presents 8 factors affecting the work of KTQTCP at stone mining enterprises in Binh Duong, with the following concepts:
2.4.1. Business strategy
Tuan Zainun Tuan Mat (2010) Business strategy is the plans and solutions that guide the activities to help the enterprise achieve the set goals in the short and long term. In the stone mining enterprise, this factor has the same impact as the application of KTQTCP so that managers can build specific and clear business strategies.