Abstract

The topic of this research is effects of standard costing on the profitability of a manufacturing company. The purpose of this study was to discover if the application of standard costing techniques have any effect on profitability, to explore the relationship between standard costing and the profitability of manufacturing companies and also to determine whether standard costing techniques and principles are being adopted and practiced in Nigerian manufacturing companies (Nigerian breweries Plc). The design of this study is descriptive survey method and the study was conducted in Nigerian Breweries Plc, Alakia Ibadan. Self administered questionnaire was used to collect data which was analysed using frequency table and chi-square. It was discovered that proper accounting records are kept and are significantly necessary in the management of the company, the company employed standard costing in costing their product and decisions were made with the standard costing information obtained in the company. The accounting reports were prepared and presented to the company’s management and that actions were taken promptly on the information given in the report. It was also discovered that effective application of standard costing has effect on the profitability of the company, the company benefited in a significant way through the use of standard costing especially in the improvement of profit. The researcher came to a conclusion that standard costing was widely used in Nigerian manufacturing companies and that standard costing enhanced adequate planning, control and decision making processes in the company. That standard costing enhanced manufacturing companies in the elimination of unprofitable products, provision of costing information and cost control.

Table of Content

CHAPTER ONE
1.0 Introduction 1
1.1 Background to the study 2-4
1.2 Statement of the problem 4-5
1.3 Objectives of the study 5
1.4 Research questions 6
1.5 Hypothesis formulation 6
1.6 Significance of the study 7
1.7 Scope of the study 7-8
1.8 Justification of the study 8-9
1.9 Definition of relevant terminologies 9-10
CHAPTER TWO
2.0 Literature review 11
2.1 Concept of standard costing 11-16
2.2 Features of standard costing 16-29
2.3 Advantages and disadvantages of standard costing 30-33
2.4 Concept of profitability 33-35
2.5 Measurement of profit 35-38
2.6 Profit and profitability 38-39
2.7 Areas where standard costing improve profitability 40-45
2.8 Brief historical background Of Nigerian Breweries Plc 45-50
CHAPTER THREE
3.0 Research methodology 51
3.1 Introduction
3.2 Area of Study
3.3 Population of the study
3.4 Research design 51
3.5 Sample and sampling techniques 53-54
3.6 Instrumentation for Data Collection 51-52
3.7 Reliability and validity instrument 52
3.8 Data Collection Procedures
3.9 Method of data analysis 55
CHAPTER FOUR
4.0 Data presentation, analysis and Interpretation 56
4.1 Data presentation 56-66
4.2 Data Analysis and Interpretation
4.3 Testing of hypothesis 66-68
CHAPTER FIVE
5.0 Summary, conclusions and recommendation 69
5.1 Summary of findings 69
5.2 Conclusions 70
5.3 Recommendations 71
5.4 suggestion for further research studies
REFERENCES 72-73
APPENDIX 74-75

Introduction

Standard costing is a performance appraisal technique used by comparing actual performance against the standards for all areas of operations with the organization. This is done in discussion with various heads of organization segments. When actual performance takes place, the actual data are compared with standards; if there is a difference between actual and standards, the difference is analysed to find reason thereof. Deviation of actual from standard is called ‘variance’. Such variance, maybe ‘favourable’ or ‘Adverse’ for the organization Abdullahi, (2014). Controlling cost involves providing clear cut information on what the cost should be incurred, what the cost was actually incurred, what is the variance between what was and what should have been, why and what remedial action should be taken to ensure that the actual occurrence agree with the planned. Standard costing is a measure of comparison for quantity and qualitative values. It is a normal reference point for re-evaluation of performance. It has also been variously referred to as the preparation and the use of standard cost and measurement at the points of incidence Okoye, (2013). Standard costing is concerned with measures of efficiency, which describes how managers can have control over the acquisition and use of resources in producing a given quality of output.

Effects Of Standard Costing On The Profitability Of Manual Manufacturing Companies (A Case Study Of Nigerian Breweries PLC. Alakia, Ibadan)

Key Features

Table of Content

Introduction