THE UTILIZATION OF MANAGEMENT DIFFERENTIAL ACCOUNTING IN DECISION MAKING REGARDING FIXED ASSET INVESTMENT AT PDAM TIRTANADI, NORTH SUMATERA PROVINCE

Abstract

PDAM  Tirtanadi in North  Sumatera  province  is a  provincial- owned  utility   company  that  supplies   clean   water  for  this province’s   population.        In    terms    of   accomodating    the increasing  needs and demands of clean  water, PDAM  Tirtanadi is still facing challenges as there is still a  long queue  of new installation requests  that which  could  not be processed  yet. The  purpose  of  this  research  is  to  explore  more  into  the utilization of management accounting information in decision making  regarding the  company’s  fixed  asset  investment  and other related factors that contribute to the company’s inability to meet the demands of clean water from the population.   This research  is done  in descriptive manner as a  case study.  The methods applied in gathering necessary data is through documentations and interviews.   The result of the conducted research shows  that  the  management  of the  company  has indeed  utilized  differential  accounting  information  in decision making for fixed asset investment, in which the company both produce clean water on their own and purchase bulk water to strive  to  keep  up  with  the  demands  from  the  population. Other factors found that cause the challenges in meeting the existing  demands  of clean  water from the population  in this area is the limited supplies of raw  water, the high level of loss water, the limited capacity of production, and the  inability to provide water continuity.

Keywords: Management Accounting Information, Decision Making