1.0 Introduction - - - - - - - 1
1.1 Background of the study - - - - - 3
1.2 Statement of the problems - - - - - 4
1.3 Objective of the study - - - - - - 6
1.4 Research of hypothesis - - - - - - 6
1.5 Significance of the study - - - - - 7
1.6 Scope of the study - - - - - - 8
1.7 Historical background of the case study- - - - 8
1.8 Definition of the terms - - - - - - 10
CHAPTER TWO: Literature
Review
2.0
Introduction- - - - - - - - 13
2.1
Financial accounting - - - - - -
14
2.2 Management accounting - - - - - 15
2.3 Users of accounting information - - - -
17
2.4 Standard for accounting information - - - 20
2.5 The need for accounting information - - - 22
2.6 Presentation of information - - - - - 26
2.7 Over view of external financial statement- - -
27
2.8 Cost calculation - - - - - - - 33
2.9 Ratio and percentage analysis - - - -
35
2.10 Break Even analysis - - - - - -
37
2.11 Financial Decision - - - - - -
37
CHAPTER THREE
3.0
Introduction - - - - - - -
40
3.1
Research design - - - - - - - 41
3.2
Population of study- - - - - - -
42
3.3
Sample
of the study - - - - - - 42
3.4
Sampling techniques- - - - - - -
43
3.5
Method of data collection - - - - - 43
3.6
Method of data analysis - - - - - 47
CHAPTER FOUR: Data Presentation, Analysis
and interpretation
4.0
Introduction - - - - - - - 48
4.1
Interview with the finance department - - - 49
4.2
Interview question with the management - - 51
4.3
Test of hypothesis - - - - - - 53
CHAPTER FIVE: Summary, Conclusions and Recommendations
5.0
Introduction - - - - - - - 64
5.1
Summary - - - - - - - - 64
5.2
Conclusion - - - - - - - - 67
5.3
Limitation
of the study - - - - - - 68
5.4
Recommendations - - - - - - 69
Bibliography- - - - - - - - 71
Appendix A- - - - - - - - 72
Appendix B- - - - - - - - 73
CHAPTER ONE
1.0 INTRODUCTION
An
organization needs qualitative information to function or make decision; the
available of such information make the organization to function in the most
effective and efficient manner. This information is provided by the accounting
system to the management, which uses it primarily to accomplish three (3) broad
purposes, viz:
i.
To provide financial statement to interested
external users
ii.
To plan the operations of the organization in
both the short and long run.
iii.
To control the result of its operations
In
financial accounting, the responsibilities of the accountant ranges from
recording and analysis, summarizing and reporting the result of the activities
of the organization to creditors, stock holders and prospective investors,
government, labour, environmental organization and others. In the case of
reports to external users, they are classified for general purpose; they are
financial statement, the income statement, the retained earnings, the balance
sheet and the statement of financial position. People who protest or enhance
their investment in the organization as by other who have a special interest in
it use this statement. In management accounting, accountants provide
information for use by office within the organization (the managers) rather
than for use by other outside the organistion, such information are mainly
decision making concerning the internal function organization. Management
accounting also provides information to the decision makes for the following
purpose:
i.
Formulation of policies
ii.
Planning and controlling the activities of
the enterprises
iii.
Safeguard the assets of the organization
iv.
Disclosure of employee’s area of
specialization
v.
Decision taken alternative cause by action.
Management
and financial accounting may be understood by considering the basic goals of
financial accounting is to direct forms of operations to maximize income the
period measure net income used by the management in making decision to avoid
what may be considered as an unwise decision to external user or vice versa.
However, the relevance accounting information effective decision making in this
research work, the degree of the relationship shall be clearly spelt out and
identified.
1.1
BACKGROUND
OF THE STUDY
The
choice of the topic “Accounting information as a tool for management decision
making” has been motivated by the fact that whatever accounting on information
is presented to the has been collected, classified and analysis will determine
the extent to which it is to be relied upon by the management in order to
formulate a favourable decision in the organization.
The
project therefore examines the relevance of accounting information to
managerial decision making manufacturing companies with a view to highlighting
the area of weakness and making necessary recommendations.
It
is infact in the light of the above that attempt be made to apprais the essence
of accounting information in making decision concerning he use of limited
resources, including the identification of the overall organization objectives.
1.2
STATEMENT
OF PROBLEMS
Management
who thinks that they operate successfully without the use of the information
provided by the accountings and up being economic failure to their respective
industries, and some times course embarrassment to the organization. Take for
instance, the accountant of an organization provide his manager with the
information that there is no fund for any programme execution in the company.
Despite this information, the manager went ahead an instructed the accountant
to draw a cheque payable to a contractor who supplied some materials to the
organization for settlement. Due to this action of the manager, the following
condition is bound to happen.
·
This cheque is going to bounce because there
is no money in the company’s account
·
If care is not taken, the contractor may sue
the organization (company)
There
are many different types of decision for which managers need accounting
information, listed below are four (4) examples of typical question that
regularly confront managers, they include:-
i.
What product line is to be produced?
ii.
What price should be set for a product line?
iii.
Should old equipments be replaced with new
ones?
iv.
Should a product line be dropped?
v.
Has an employee performed well enough to warrant
a bonus?
vi.
Should short-term borrowing be arranged to
finance current operation?
For
managers to make the best decision to resolve each of these questions the
management accountant must provide quantitative information that is timely and
relevant, it is with this information that managers can properly plan and
control the organization operations. And these are some of the question and
problems this research work intend to prepare solution to:
In
conclusion, managers cannot take effective decision if the information provided
to them but their accountants are not properly adhered to. It is this kind of
problem that form the basis of this research work in which the relevant of
accounting information in management decision making will be examined.
1.3
OBJECTIVE
OF THE STUDY
The
objective of the study is concerned with established of the relevance of
accounting information to managerial decision-making in manufacturing concerns.
It is to further review and analyze accounting information in line with modern
day techniques of presenting accounting information and its unique role as aid
in decision making by the management. The purpose of this study therefore
include the following.
i.
To known the problem remedied of getting
information for decision making with special reference to Zaki flour Mill Azare
ii.
To carefully look at the need for accounting
information as a vital tools for managerial decision making
iii.
To know how the management of the company
under view have been using the accounting information given to them
iv.
To make suggestion as to the usefulness of
accounting information its users in general
1.4
RESEARCH
OF HYPOTHESIS
We
research work is complete without a hypothesis with hypothesis, a research work
is consider to be meaningful and with direction simply, hypothesis show the
relation between two or more variable which are in opposite to one another. In
other words, it is in assumption information of a statement made by the
research, which can only be accepted or rejected.
To
this end, the researcher advanced the following as the basic of this research
hypothesis.
-
Null hypothesis (H0)
That
with good system of the accounting information the management of Zaki flourmill
Azare can make a good decision to promote efficiency in its operations
1.5
SIGNIFICANCE
OF THE STUDY
The
study is of significance in that; the findings will be of almost important to
many establishments and to the business society at large. This is because it
will determine whether accounting information in the manufacturing concern can
serve as a vital tool in managerial decision-making.
Also,
the study will serve will as a supply of knowledge of manager and accountants
on how they can improve decision making procedure of their companies for an
effective performance and also to those who wanted to carry out further
research on the same topic in the future.
1.6
SCOPE
OF THE STUDY
This
work will cover some aspects of accounting techniques in operation in the
manufacturing organization with reference to Zaki flour mills Azare and the
type of report prepared for decision-making. The researcher intends to examine
the relationship that exist between accounting information and management
decision-making. Some related literature in the field of study would also be
alid on the usefulness fo each of the information prepared by individual
segment of the accounting branches.
1.7
HISTORICAL
BACKGROUND OF THE CASE STUDY
Grains
Processing Company (Nigeria
The
company was the baby of the state government; the promotion of the company was
alter taken over by the Nigerian bank for commerce and industry (NBCI) in
accordance with the bank policy of the Military Government. The establishment
of this company was formed by the need to increase production by utilizing
local materials. The company is a private Limited Liability Company essentially
incorporated to process various grains into flour human consumption, presently
its ownership structure comprises of:-
- Complex trading company of Hungary
- Nigerian Bank for commerce and industry 40%
- Bauchi State
- Other individuals 0.6%
Total 100%
The
major machineries (plant and machinery) which the company started with include;
Rollers, purifiers, plain shifter, servers, pneumatic system etc. The floor
mills is capable of processing 47% of 200 tonners daily and its products
comprises Maize grits, maize flour, millet flour, millets grits, wheat flour,
Grains corn flour, grains corn grits etc.
The
company markets its product through appointed dealer and sale officers in some
parts of Bauchi, Yobe, Borno, Adamawa, Kano
1.8
DEFINITION
OF TERMS
Accounting: Is
the art of anlaysis, evaluating and interpreting of Organization financial
activities and position, communicating the results to those who are interested.
It can also be defined as the process of identifying, measuring and
communicating economic information of facilitate informed judgment and decision
by users of the information. It is a system designed to serve organizational
goals.
Management accounting: Is
the application of professional knowledge and skill in the preparation and
presentation of accounting information in such a way as to assist the
management in the formulation of policies and in the planning and the operation
of the understanding.
Financial accounting: Is
concerned with the preparation of general-purpose report for use by person
outside the firm. It involves preparation of profit and loss account and the
balance sheet, they are prepared in general terms suitable for presentation to
shareholder and the general public, and they are also of interest to the
management
Planning: Is
the process of deciding what action should be taken concerning the organisation
in the future.
Information:
Means a complete set of processed data that has a meaning to the decision maker
Control:
This involve overseeing the activities of the employee of the organization of
the manager, they make sure that management policies are strictly adhered to.
Co-ordination: Is
the bringing together of the various units of an organization to work toward
the achievement of this overall objective
Creditor: An
individual or institution that provides part of a company’s resources lending
it money out.
Inventory: It
is referred to as store keeping items and are heated at storage level. Store
keeping items usually consist of raw materials, work-in-progress and finished
and supplies
Company:
Includes any enterprise which comes within the scope of the statement of
standard accounting practices (S.S.A.P).
Assets: These are the
resources owned by the company. It may be tangible such as land, Building and
machineries etc. it may also intangible such as Debtor, cash at bank etc
Liabilities:
These are debts or obligations of the company. They arise primarily because of
the purchase of goods or services from other credit or through cash borrowing
to finance the business.
Balance sheet: Is
a statement of assets and liabilities of an organization, which shows the
financial position of the organization for a particular accounting period.
Management:
This means groups of decision make in an organization who see the smooth
running of the affairs of the organization. It could also mean the act of
getting things done with effective spirit of information and effective of
co-ordination.
Dividends: Is a profit to be shared to the shareholders
of a company after deducting all expenses including tax.
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