Description
A Case Studies on Appraisal of the Application of Cost and Management Accounting Techniques in Nigerian Manufacturing Companies: Benue Breweries Company Limited:- Management accounting or managerial accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.
A Case Studies on Appraisal of the Application of Cost and Management Accounting Techniques in Nigerian Manufacturing Companies: Benue Breweries Company Limited
1
TABLE OF CONTENTS Title page i ii iii iv v vi
Approval Stage Dedication -
Acknowledgement Table of contents Abstract -
CHAPTER ONE: INTRODUCTION 1.1 Background of the study 1.2 Statement of the problem 1.3 Objectives of the study 1.4 Research questions 1.5 Research Hypotheses 2
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1 5 8 8 9 11 12
1.6 Significance of the Study 1.7 Scope of the study -
1.8 Definition of terms -
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12
CHAPTER TWO: REVIEW OF RELATED LITERATURE 2.1 Introduction 14 14 16 18
2.2 The conceptual framework 2.3 costing system 2.4 Management --
2.5 Relationship between Management Accounting and Cost Accounting -3
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-
-
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21 21 23 28 29 29 31
2.6 Cost Accounting Techniques 2.6.1 Standard costing 2.6.2. Absorption Costing 2.6.3. Marginal Costing 2.6.4. Budgeting control 2.6.5. Queuing Theory -
2.6.6. Linear programming 2.6.7 Decision making -
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33 34 35 35 36 38 39 40 42
2.7 Major Themes of management Accounting 2.7.1 Future orientation 2.7.2 Economic Reality 2.7.3 Goal Congruence 2.7.4 Information System -
2.7.5 Statistical and Operation Research Techniques 2.7.6 Uncertainty -
CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction 4
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-
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44 45 46 47
3.2 Research Decision -
3.2.1 Population and sample size 3.3 Method of Data Collection -
3.3.1 Method of Data Analysis CHAPTER FOUR: DATA
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-
-
-
-
-
48 AND
PRESENTATION,
ANALYSIS
INTERPRETATION OF DATA 4.1 Introduction 51 51 57 64
4.2 Data Presentation and Analysis 4.3 Testing of Hypotheses -
4.4 Interpretation of findings -
CHAPTER FIVE: SUMMARY, CONCLUSSION AND RECOMMENDATION 5.1 Introduction 67 67 70 72 74
5.2 Summary of Findings
5.3 Generalization of findings 5.4 Recommendations -
5.5 Recommendations for Further Studies
5
5.6 limitations of StudyBibliography Appendices -
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-
-
-
-
-
-
74 76 78
6
Abstract Well established cost and management accounting techniques will provide much more than ascertainment of the cost of each job, contract or process carried out. It will provide the information from which can be prepared to total portion of producing and selling goods and services during a particular period. Cost and management accounting techniques are essentially analytical in value. As a result, it is therefore to devise systems which will suit all business. Hence the techniques to be adopted on any special case must be established to suit that particular business under consideration. Considering this background, this study was undertaken on “An Appraisal of the Application of Cost and Management Accounting Techniques in Nigeria Manufacturing Companies” using Benue Brewery Limited as a case study. The result of the study indicates that costing techniques should be adopted by Brewing companies. The implementation of process costing techniques in the case under study has been evaluated and recommendations made. It is strongly believed that if the recommendations are implemented, it will not only help the organization under study but any other similar organization and the country’s economy.
7
CHAPTER ONE INTRODUCTION I.1 Background to the Study The growing complexity of modern production method results in greater capital investment, competition and modern market. For any company to be successful in such environment, it must have a good costing system. The attainment of this objective demands careful selection of a costing system that suites the production process of the company
Statement of the Problem The aim of the research work is to find out the cost and management accounting techniques to be established in manufacturing companies, hence the life wire of every country’s economy lies upon the state of its manufacturing companies. 1.5 Research Hypotheses
8
Akpa and Angahar define a research hypothesis as a conjunctional statement or general phase which cannot be determined until it is proven. In a related development, Asika, (1991) said a null hypothesis is central in research and is the hypothesis that is tested. The word No which is the null hypothesis (Ho) will be stated in the negative assertion from which its alternative (Ha) will be used for a positive assertion form.
1.6 Significance of Study The study when successfully completed will be of great importance in the application of cost and management accounting techniques and those who are intending to adopt the technique. This is because, the research will review the role of cost and management accounting techniques to manufacturing companies both private and public. This will also enlighten manufacturing companies’ operators so
9
as to carry out the business effectively and efficiently. The study will serve as a useful material for the management of Benue Brewery Limited, researchers and other companies in the manufacturing industry. In addition, this research work will be, an addition to the stock of material available to the researcher in the area of cost and management accounting techniques. 1.7 Scope of the study The purpose or aim of this research is to appraise the application of cost and management accounting techniques as a powerful tool used in manufacturing companies to evaluate their decision making in order to achieve the predetermined objective of the company. However, due to large population of manufacturing companies in Nigeria, the topic has been narrowed down to Benue Brewery Limited which serves as a case study for the research. Therefore, it is within the researchers reach.
10
1.8 Definition of Terms I. Absorption Costing: A principle whereby the full cost of production, direct labour, direct material and manufacturing overhead are allocated to units produced during the period. II. Break- even- point: The point at which revenue fully covers all expenditure and only that, no margin of profit exist. III. Budget: A financial and/or quantitative statement and approved prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective. IV. Cost Allocation: The allocation of whole items of costs to cost units or cost centres. V. Cost apportionment: The cost allotment of a proportion of items of cost to cost units or cost centres. VI. Cost control: The regulation by executive action of the cost of operating and undertaking VII. Queuing: It is simply the mathematical approach to the analysis of waiting lines.
11
doc_402008420.docx
A Case Studies on Appraisal of the Application of Cost and Management Accounting Techniques in Nigerian Manufacturing Companies: Benue Breweries Company Limited:- Management accounting or managerial accounting is concerned with the provisions and use of accounting information to managers within organizations, to provide them with the basis to make informed business decisions that will allow them to be better equipped in their management and control functions.
A Case Studies on Appraisal of the Application of Cost and Management Accounting Techniques in Nigerian Manufacturing Companies: Benue Breweries Company Limited
1
TABLE OF CONTENTS Title page i ii iii iv v vi
Approval Stage Dedication -
Acknowledgement Table of contents Abstract -
CHAPTER ONE: INTRODUCTION 1.1 Background of the study 1.2 Statement of the problem 1.3 Objectives of the study 1.4 Research questions 1.5 Research Hypotheses 2
-
-
-
-
-
1 5 8 8 9 11 12
1.6 Significance of the Study 1.7 Scope of the study -
1.8 Definition of terms -
-
-
-
-
-
-
-
12
CHAPTER TWO: REVIEW OF RELATED LITERATURE 2.1 Introduction 14 14 16 18
2.2 The conceptual framework 2.3 costing system 2.4 Management --
2.5 Relationship between Management Accounting and Cost Accounting -3
-
-
-
-
-
21 21 23 28 29 29 31
2.6 Cost Accounting Techniques 2.6.1 Standard costing 2.6.2. Absorption Costing 2.6.3. Marginal Costing 2.6.4. Budgeting control 2.6.5. Queuing Theory -
2.6.6. Linear programming 2.6.7 Decision making -
-
-
-
-
-
-
-
33 34 35 35 36 38 39 40 42
2.7 Major Themes of management Accounting 2.7.1 Future orientation 2.7.2 Economic Reality 2.7.3 Goal Congruence 2.7.4 Information System -
2.7.5 Statistical and Operation Research Techniques 2.7.6 Uncertainty -
CHAPTER THREE: RESEARCH METHODOLOGY 3.1 Introduction 4
-
-
-
-
44 45 46 47
3.2 Research Decision -
3.2.1 Population and sample size 3.3 Method of Data Collection -
3.3.1 Method of Data Analysis CHAPTER FOUR: DATA
-
-
-
-
-
-
48 AND
PRESENTATION,
ANALYSIS
INTERPRETATION OF DATA 4.1 Introduction 51 51 57 64
4.2 Data Presentation and Analysis 4.3 Testing of Hypotheses -
4.4 Interpretation of findings -
CHAPTER FIVE: SUMMARY, CONCLUSSION AND RECOMMENDATION 5.1 Introduction 67 67 70 72 74
5.2 Summary of Findings
5.3 Generalization of findings 5.4 Recommendations -
5.5 Recommendations for Further Studies
5
5.6 limitations of StudyBibliography Appendices -
-
-
-
-
-
-
-
74 76 78
6
Abstract Well established cost and management accounting techniques will provide much more than ascertainment of the cost of each job, contract or process carried out. It will provide the information from which can be prepared to total portion of producing and selling goods and services during a particular period. Cost and management accounting techniques are essentially analytical in value. As a result, it is therefore to devise systems which will suit all business. Hence the techniques to be adopted on any special case must be established to suit that particular business under consideration. Considering this background, this study was undertaken on “An Appraisal of the Application of Cost and Management Accounting Techniques in Nigeria Manufacturing Companies” using Benue Brewery Limited as a case study. The result of the study indicates that costing techniques should be adopted by Brewing companies. The implementation of process costing techniques in the case under study has been evaluated and recommendations made. It is strongly believed that if the recommendations are implemented, it will not only help the organization under study but any other similar organization and the country’s economy.
7
CHAPTER ONE INTRODUCTION I.1 Background to the Study The growing complexity of modern production method results in greater capital investment, competition and modern market. For any company to be successful in such environment, it must have a good costing system. The attainment of this objective demands careful selection of a costing system that suites the production process of the company
Statement of the Problem The aim of the research work is to find out the cost and management accounting techniques to be established in manufacturing companies, hence the life wire of every country’s economy lies upon the state of its manufacturing companies. 1.5 Research Hypotheses
8
Akpa and Angahar define a research hypothesis as a conjunctional statement or general phase which cannot be determined until it is proven. In a related development, Asika, (1991) said a null hypothesis is central in research and is the hypothesis that is tested. The word No which is the null hypothesis (Ho) will be stated in the negative assertion from which its alternative (Ha) will be used for a positive assertion form.
1.6 Significance of Study The study when successfully completed will be of great importance in the application of cost and management accounting techniques and those who are intending to adopt the technique. This is because, the research will review the role of cost and management accounting techniques to manufacturing companies both private and public. This will also enlighten manufacturing companies’ operators so
9
as to carry out the business effectively and efficiently. The study will serve as a useful material for the management of Benue Brewery Limited, researchers and other companies in the manufacturing industry. In addition, this research work will be, an addition to the stock of material available to the researcher in the area of cost and management accounting techniques. 1.7 Scope of the study The purpose or aim of this research is to appraise the application of cost and management accounting techniques as a powerful tool used in manufacturing companies to evaluate their decision making in order to achieve the predetermined objective of the company. However, due to large population of manufacturing companies in Nigeria, the topic has been narrowed down to Benue Brewery Limited which serves as a case study for the research. Therefore, it is within the researchers reach.
10
1.8 Definition of Terms I. Absorption Costing: A principle whereby the full cost of production, direct labour, direct material and manufacturing overhead are allocated to units produced during the period. II. Break- even- point: The point at which revenue fully covers all expenditure and only that, no margin of profit exist. III. Budget: A financial and/or quantitative statement and approved prior to a defined period of time, of the policy to be pursued during that period for the purpose of attaining a given objective. IV. Cost Allocation: The allocation of whole items of costs to cost units or cost centres. V. Cost apportionment: The cost allotment of a proportion of items of cost to cost units or cost centres. VI. Cost control: The regulation by executive action of the cost of operating and undertaking VII. Queuing: It is simply the mathematical approach to the analysis of waiting lines.
11
doc_402008420.docx