Abstract
This
study seek to examine the relevant of cost accounting information for
management decision making (A case study of Guinness Nigeria Plc, Benin City).
The study also explained the possible connection between the definition,
relevance terms and also the background of Guinness Nigeria Plc. It is aimed at
ascertaining the place of cost accounting in business organization. The data
obtained were analyzed using simple percentage while chi-square was used in
testing the hypotheses. From the test carried out, it was discovered that
costing system have not been properly installed and wastage had been properly
minimized with efficiency in production. It was recommended that the negative
impact of cost accounting in Guinness Nigeria Plc should be tackled without delay
for improved efficiency. It was concluded that industries have outgrown the era
of rule of thumb and guess-work, and that, for business to survive they must
know what they are doing in order to face these threats.
TABLE OF
CONTENTS
Title Page
Certification
Dedication
Acknowledgments
Abstract
Table of Contents
Chapter One: Introduction
1.1 Background
to the Study
1.2 Statement
of Problem
1.3 Research
Questions
1.4 Objectives
of the Study
1.5 Statement
of Hypotheses
1.6 Significance
of the Study
1.7 Scope
of the Study
1.8 Limitations
of the Study
1.9 Definition
of Terms
Chapter
Two: Review of Related Literature
2.1
Introduction
2.2 Cost Classifications
2.3 Cost Accounting System
2.4 Standard Costing and Variance Analysis
2.5 Activity-Based Costing (ABC)
2.6 Target costing
2.7 Marginal Costing
2.8 Relevance of Cost Accounting Information in
Management Decision Making
Chapter
Three: Research Method and Design
3.1 Introduction
3.2 Research
design
3.3 Description
of the Population of the Study
3.4 Sample
Size
3.5 Sampling
Techniques
3.6 Sources
of Data Collection
3.7 Method
of Data Presentation
3.8 Method
of Data Analysis
Chapter
Four: Data Presentation,
Analysis
and Interpretation
4.1 Introduction
4.2 Presentation
of Data
4.3 Data Analysis
4.4 Hypothesis
Testing
Chapter Five: Summary of Findings, Conclusion and Recommendations
5.1
Introduction
5.2
Summary of Findings
5.3
Conclusion
5.4
Recommendations
References
Appendix I
Appendix II
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Cost accounting has
long been used to help managers understand the costs of running a business.
Cost accounting today is recording, budgeting, analyzing and determining cost
for products manufactured.
Modern cost accounting
originated during the industrial revolution, when the complexities of running a
large scale business led to the development of systems for recording and
tracking cost to help business owners and managers make decision.
The basic objective of
this study is to examine comprehensively how cost accounting information is
being presented in a large organization. Cost accounting system of any
organization is the foundation of the internal financial information plan, to
control and make decision.
The information
provided by costing system are cost per unit of production, process cost of
running a sector or department, wages cost of a unit of production scrap cost
etc.
1.2 Statement of Problem
The growth of business
activities in production process and information provision, aid management in
taking timely, accurate and effective decision which brought out the need for
an appropriate cost accounting system that will meet the need of the
organization as an entity.
When an appropriate
system is installed, output is increased efficiency and profit maximization is
recorded, therefore, this study aims to highlight the relevant of cost
accounting system using Guinness (Nig) Plc, Benin as a case study.
1.3 Research Questions
The following research
questions were raised for the study:
i. To what extent is cost accounting relevant
in management decision making?
ii. How is cost accounting a management control
system?
iii. What is the significant relationship between
cost accounting information and efficient management decision making?
1.4 Objective of the Study
The broad objective of this
study is to ascertain the relevance of cost accounting information in management
decision making. However, for a broader view, the following are the
sub-objectives of the study:
i. To ascertain if cost accounting relevant
in management decision making.
ii. To determine if cost accounting is a
management control system.
iii. To examine the significant relationship
between cost accounting information and efficient management decision making.
1.5 Statement of Hypothesis
The hypothesis of this
research is divided into two as null (Ho) and alternative (Hi). If the null
hypothesis were rejected, then the alternative hypothesis is accepted and
vice-versa.
The hypothesis is to be
tested as follows:
Hypothesis
I
Ho: Cost accounting is not relevant in management
decision making.
HI: Cost accounting is relevant in management
decision making.
Hypothesis
II
Ho: Cost accounting is not a management control system.
HI: Cost accounting is a management control system.
Hypothesis III
HO: There is no significant relationship between cost
accounting information and efficient management decision making.
HI: There is significant relationship between
cost accounting information and efficient management decision making.
1.6 Significance of the Study
The significance of the
study is to able to ascertain the relevance of costing system in an
organization overall performance. It’s specific function and contribution to
efficiency in production processes.
It will enable
management to know the importance of costing system, thus ensuring them to kook
at the purchase department with seriousness in any organization in which it is
found.
This project will also
be relevant to both the students and government. For government, it will help
in the prudent management of scarce resources and for the interested student,
it will equipped them more on the understanding of costing system as a concept.
1.7 Scope of the Study
As a result of time
constrain, it will be delimited to those areas that are necessary for the purpose
of this research. Hence, the relevance of cost accounting and costing system or
techniques will be covered. This study focuses on the cost accounting
department of Guinness (Nig) Plc, Benin City, Edo State.
1.8 Limitation of the Study
During this research
work, a lot of constraints limitations were encountered. During the course of
such academic exercise, some of these constrains encountered were unusual and
boring. Collection of primary data for this study was a major constraints, as
the researcher has to be on field personally in all the data collected
processes. Inadequate internet facilities on the research work.
1.9 Definition of Terms
Constant
Cost: Cost of production may
be fixed for variable. The fixed or content cost are those that do not change
with changes in production. The variable cost of production do change with the
volume of production. If reference is made to unit cost of production then many
of the fixed cost of total production will become variable unit cost.
Cost
Unit: A cost unit is a unit
of production or service to which cost can be related. The nature of the cost
unit will obviously depend on the types of goods being produced or the type of
services by the business concerned.
Cost
Centre: According to Abohi
(2002), cost centre can be defined as “a location, person or item of equipment
(or group of those) for which costs may be ascertained and use of the purpose
of cost control.
Cost
Control: This refers to the
ability of management to monitor and supervise expenditure (i.e. current and
capital) in order to ensure that things are going according to plan and that actual results are
obtained for comparison against planned result so that appropriate corrective
action(s) can be taken on the variance that is bound to arise before it is too
late.
Activity
Level: Activity level
constitutes the main basis for forecasting cost especially where changes or
future changes are to be measured.
Variance: This is the difference between an actual amount and
a predetermined standard amount. That is were actual cost is different from the
estimated standard cost.
Decision
Making: According to Pearson
(1990) is the mental process resulting in the selection of a course of action
among several alternatives scenarios.
Time
Ticket: A document that
indicates the employer, the hour worked, the account and job to be charged, and
the total labour cost.
Job
Cost Sheet: A form used to record
the cost chargeable to a specific job and to determine the total and unit cost
of the completed job.
Overapplied
Overhead: A situation in which
overhead assigned to work process is greater than the overhead incurred.
Cost
Driver: Any factor or activity
that has a direct cause-effect relationship with the resources.
Underapplied
Overhead: A situation in which
overhead assigned to work in process is less than the overhead incurred.
Conversion
Cost: The sum of labour cost
and overhead costs.
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