Management accounting practices and financial performance of KTDA factories in Gusii region

In the ever-evolving landscape of business, effective management accounting practices have emerged as critical components in driving financial performance. The study objective was to determine the relationship between management accounting practices and financial performance of KTDA owned factories in Gusii region. The study was anchored on resource based, agency, goal setting and market singling theories. Positivism research philosophy and descriptive research design was adopted. The study targeted a population of 309 which comprised of; managers, departmental heads, accountants and directors. A sample of 249 respondents was drawn from the target population using stratified sampling. Secondary data was obtained from published and audited annual financial reports for the period of six years 2019-2024. Data was analyzed by descriptive statistical methods like mean, frequencies, percentages and standard deviation while inferential statistical methods were applied by use of correlation, simple, multiple and hierarchical regression analysis and the results were presented in tables. The study found that: through creation of cost drivers KTDA factories were more accurate in estimating costs, budget evaluation committee must appraise all Budget items before they are approved, target costing was used to encourage efficient use of materials, benchmarking was adopted as a process of increasing their market share. It was concluded that Activity-based costing had a positive moderate significant relationship with financial performance. Budgeting as a practice had a negative, weak and insignificant relationship with financial performance, Target costing had a positive weak and insignificant correlation with financial performance. Benchmarking practice indicated a positive moderate and significant relationship with financial performance. The study recommended that qualified technicians or professionals to be hired and employment of new technology in order to enhance the ability to identify cost gaps in the process of cost setting, factory management should use budgets effectively as a cost control tool, qualified professionals to be hired in order to enhance the ability to identify cost gaps in the process of cost setting. Factories should aim at producing quality products in order to remain competitive in the market and sound policies which are data driven intervention and addressing quality standards instead of political rhetoric.