CHAPTER
ONE
Introduction
1.
Introduction - - - - - - - - 1
1.1 Background
of the study - - - - - - 1
1.2 Statement
of study - - - - -- - 2
1.2 Objectives
of the study - - - - - - 3
1.3 Research
Hypothesis - - - - - - 4
1.4 Significance
of the Study - - - - - 4
1.5 Scope
of the study - - - - - - - 5
1.6 Historical
Background of NBTE - - - - 5
CHAPTER
TWO
Literature
Review
2.1 Introduction - - - - - - - - 7
2.2 Meaning
of cost accounting - - - - - 8
2.3 Planning
and the application of cost accounting - - 9
2.4 Control
and cost accounting - - - - - 15
2.5 Standard
cost as a tool for control - - - - 19
2.6 Decision
making - - - - - - - 24
2.7 The
decision making process - - - - - 25
CHAPTER
THREE
Research
Methodology
3.0 Introduction - - - - - - - - 29
3.1 Population
and Sample Size - - - - - 29
3.2 Sampling
Techniques - - - - - - 30
3.3 Sources
and Method of Data Collection - - - 30
3.4 Method
of Data Analysis - - - - - - 31
3.5 Justification
for the Choice - - - - - 31
CHAPTER
FOUR
Data
Analysis and Interpretation
4.
Introduction - - - - - - - - 32
4.1 Data
Presentation - - - - - - - 32
4.2 Analysis
of Questionnaire - - - - - 33
4.3 Testing
Hypothesis - - - - - - 41
4.4 Summary
of findings - - - - - - 41
CHAPTER
FIVE
Summary,
Conclusion and Recommendations
5.1 Summary - - - - - - - - 43
5.2 Conclusion - - - - - - - - 44
5.3 Limitation
of the Study - - - - - - 45
5.4 Recommendations - - - - - - 46
Bibliography - - -- - - - - 48
CHAPTER ONE
1.
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The main theme of
this project is to bring to highlight the importance of costing to the
existence of any organization, using the Nigeria Bottling company as a case
study.
Every activity and
operation of an organization involves cost. In view of this, I intend to
discuss the objectives, principles, techniques and methods of costing relating
to the analysis and gathering of cost information for planning, control and
decision making.
It must be
emphasized, that the existence of a sound well organized basic costing system
is fundamental to whatever use is made of the information whether for routine
cost ascertainment purposes or for a one – off decision.
Decisions depend
on financial factors therefore it is of utmost importance that proper costing methods
and techniques suitable for an organization operations to be ascertained,
adopted and operated effectively and religiously throughout the organizations`
process and operations.
In essence,
organization are established for a defined purpose which objective can only be
seen or shown to the world by the output (product) it produces. For there to be
an output the most necessary is the input. Inputs do not come for free;
payments have to be made on them. Taking the Nigerian Bottling Company (NBC) as
a case study, it needs inputs in the form of raw materials, labour etc. to
produce goods (soft drink) and payment must be made for these inputs, this
boils down to cost.
1.2.
STATEMENT OF THE
PROBLEM
In the past, many
companies have witnessed considerable lapses and increasing changes in
management disciplines. Costing an important element in the overall operation
of an organization through the provision of relevant information about cost is
one of the problems organizations are facing. Because there are no satisfactory
requirements to maintain detailed cost records, some small firms keep only
traditional financial accounts and prepare cost information in an
ad-hoc-fashion. In all but small firms this approach is likely to be
unsatisfactory.
There is a vast
range of systems in operation ranging from simple analysis to computer based
accounting systems incorporating standards, variance analysis and the automatic
production of control and operating statements. These different costing methods
are meant to suit different organization the adaptation of the wrong method,
for a company will constitute a problem instead of a solution. Also poor or
inadequate knowledge of a particular method of costing has constituted problems
for many firms.
Most companies are
still using the simple analysis system to set cost while some companies do not
even have a costing system. This no doubt has led to poor planning, control and
decision making.
1.3.
OBJECTIVES AND
PURPOSE OF THE STUDY
This project is
designed to provide a clear and concise understanding of the importance of
costing to the manager in carrying out his/her responsibility for planning
controlling and making decision which will lead to achieving certain goals.
This research work aim to highlight that costing is
i.
Indispensable in determining the cost per unit of a product.
ii.
A factor in pricing decision, production planning and cost
control.
iii.
An important tool in running a section, department or
factory, that is, organizational planning, decision on alternative methods,
wages cost control and material cost control.
iv.
Important in profit planning, make or buy decision etc.
1.4.
RESEARCH
HYPOTHESIS
H0: Cost Accounting is
not an indispensable tool in management planning, control and decision making.
H1: Cost Accounting is
an indispensable table in management planning control and decision making.
1.5.
SIGNIFICANCE OF
THE STUDY
It is the desire
of any management to maximize profit to boast of high profit all expenses
incurred must have to be deducted from turnover; whether profit will be low or
high largely depends on how much deductions (expenses) will be. Excessive cost
reduces turnover excessively this in turn reduces profit. This project which is
centered on the importance of establishing adequate and proper cost for
production will
Be of immense contribution towards helping managers to
determine proper cost for organizational operations
Help managers and
others in industry, commerce, local authorities and similar organization to
gain a working knowledge of the principles and processes of cost.
Enable managers to analyse, select and implement the
principle, techniques and method that best suit their firm.
1.6.
SCOPE OF THE STUDY
This study covers
a general review of the different methods and techniques of costing and how
cost accounting affects the planning, control and decision making process of an
organization using the Nigerian Bottling Company (NBC) as a case study.
1.7.
HISTORICAL
BACKGROUND OF THE FIRM
The Nigeria
bottling company [NBC] was incorporated in November 1951, as a subsidiary of
the A.G Leventis group with the franchise to bottle and sell coca-cola product
in Nigeria. From a humble beginning business, the company has grow to become a
prodominant bottler of non-alcoholic beverages in Nigeria, responsible for the
manufacture and sales of over 33 different coca-cola brands. Other popular
brands of beverages produced by the company are Eva water, Five Alive fruit
juice and the newly introduced Burn energy drink.
Coca-cola, the
product that gives the world its best known taste, was first set up in Lagos,
Nigerian in the year 1953. This became the beginning of an exciting story of
growth and development particularly in the recent past.
The company
presently has 13 bottling facilities and over so distribution warehouses
located across the country. Since production started, NBC PLC has remained the
largest bottler of non- alcoholic beverages in the country in terms of sales
volume, with about 1.8 billion bottles sold per year making it the second
largest market in Africa.
Other products by
the Nigerian Bottling Company (NBC) include Fanta orange, Fanta Tonic, Fanta
Apple, Soda water, Fanta pineapple Sprite, Bitter Lemon and Coke etc. All of
these are one of the most selling drinks in the country and worldwide. In
addition, it is today Nigeria number one bottler of soft drinks selling more
than 7,000,000 bottles per day. Currently, there are about 20 plants in various
parts of the federation and more are yet to come.
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