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. 






Title Page                                                                               





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                                                                

Appendix I                                                

Appendix II                                                        




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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