Key Features:

Chapters: 5
No of Pages: 86
Methodology: Chi Square

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Introduction:

1.1 BACKGROUND OF THE STUDY
The Nigerian economy, like those of most less developed countries is undergoing a period of economic recession. In those adverse economic condition, organization big and small have to strive to effectively and efficiently maximize profit given limited resources and the efficient utilization available materials and labour.
Since the advent and the industrial revolution in Europe, the Limited Liability Company as a major avenue of undertaking the production of good has gained province, basically because its suitability to large scale manufacturing then and indeed now, the objective of any manufacturing firm according to basic economic theory is to produce good at a cost below price so as to earn a residual otherwise known as profit. But profit has been reduced considerably as a result of new government policies and increased cost of imported raw material through the devolution of the currency this has now resulted in firms paying more affection to efficiency to increase profitability and to reduce cost with available resource which include element of cost.

Various concept cost accountings have evolved the year Okoy (1997) the rules include:
i. All cost should be charged to the functions, sections or products that caused them. For example the salary of a production of engineer should be charged to production department and not to marketing department.
ii. No cost should be charged until it is incurred for example distribution cost should not be charged on products that are still in the store. It is only proper to charge such costs to the product when they have been transported to various warehouses of customers.
iii. Cost or lease incurred in the past should not be charged to current or future operations. The exception to this rule is accepted where there is evidence that the present or future operations benefit from the post cost. For example, if the cost of advertising in the past was capitalized, a part of the cost may be charged to current or future marketing cost.

1.2 HISTORICAL DEVELOPMENT OF COST ACCOUNTING
Cost accounting was not developed until the nineteenth century. As far back as the fourteenth century, some records were found to be kept in Italy which indicates some form of cost record but they were mainly in crude form. However rapid development in this area was recorded in the twentieth century and it has been on the increase year after year.
Before the industrial revolution business venture were operated mainly on trading and that is purely buying and selling business, for this account such as trading profit and loss were prepared for the merchants to discover gross and net profit.
With the industrial revolution, industries were set up, machines to replace human labour were invented and thus manufacturing industries started springing up and that ushered in a new era. As a result and thus, it became evident that those account which were mainly prepared to discover the gross and net of the business concern consequently more detailed accounting analysis developed and this is the beginning of the development of cost accounting.
Furthermore, as the days roll by so more complex machines and industries are being established and this must be accompanied also with more complex accounting system to provide the informational needs of the management before business organization are established the need for adequate planning to ensure smooth and proper control of the operations are now evident throughout the world many organizations have closed down their business even before going into production because of improper planning and this also brought the need for feasibility studies such pre-planning has to be quantified in monetary terms and as a result the need for proper budgetary control now comes in to ensure that such plans are followed to the later.
It is on this basis that standard costing and budgetary control have been developed long range planning involves forecasting and the use of mathematical perfections to obtain, process and prepare information to guide managers in their day to day administration of providing information to management for decision making is know as management accounting.