AN EVALUATION OF COST ACCOUNTING AS A TOOL FOR MANAGERIAL DECISION MAKING (A CASE STUDY NIGERIAN BOTTLING COMPANY PLC, PLANT INDUSTRY ILORIN)

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Product Code: 00005836

No of Pages: 52

No of Chapters: 5

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TABLE OF CONTENTS

 

Certificate                                                                                                     i

Dedication                                                                                          ii        

Acknowledgement                                                                            iii

Table of content                                                                                v

 

CHAPTER ONE

INTRODUCTION                                                    

1.1    Introduction                                                                             1         

1.2    Statement of the Research Problem                         3         

1.3    Objective of the Study                                                           5         

1.4       Significance of the Study                                        6         

1.5    Research Question                                             7     

1.6    Scope and Limitation of the Study                      9 

1.7    Plan of the Study                                                                9 

1.8    Definition of the Key Terms                                 11

 

CHAPTER TWO

LITERATURE REVIEW     

2.0       Historical of Nigeria Bottling Company PLC      14     

2.1    Decision-Making in Management                            18

2.2       Cost Volume Profit (Break-Event) Analysis Model                               20  

2.3    Limitation of the Model                                                        21       

2.4    Decision under Certainty, Uncertainty and Rise                                       22

2.5    Role of decision models                                                    23

 

CHAPTER THREE     

RESEARCH METHODOLY          

3.1    Method of Data Collection                                   25                                                                                                                             

3.2    Population and Sample Size                                     29                              

3.3    Sample and Sampling Technique                             30       

3.4    Method of Data Analysis                                                      31

 

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS         

4.1    Discussion of the Analysis                                       33       

4.2    Discussion of Finding                                                            37

 

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION        

5.1    Summary of Finding                                           38   

5.2    Conclusion                                                                              39

5.3    Recommendation                                                                    40

Bibliography                                                                        43

Appendix                                                                                          45

Questionnaire                                                           46

 

 

 

 

CHAPTER ONE

1.1    INTRODUCTION                                             

The accounting system is a major qualitative information acquired in almost every organization for and it therefore provides information for the three broad purpose namely as internal reporting to managers for use, in planning and control routine operation and non-routine operation, formulation or major plan and polices and lastly the external reporting to stock-holders, government, debenture holder and other outside parties. Therefore the managers depends largely upon quality and quantity of data received. Thus, information flows in the management information system too by influence the effectiveness of decision making.

According to Hornaren (2014) the question of what accounting system to buy, must focus on how decision and consequent benefit are going to be affected. One must also ask what decision will result from accounting data and what outcome will ensure from decision making. Accounting report, which are financial model or company operations, model are useful because they provide conceptual representation or realities, enabling the decision makers to anticipate and measure the effect of alternative actions.

Decision-making is choosing among alternatives it occurs as managers perform their planning and controlling function. A decision model is one, which affect the performance of management planning and controlling functions, but only to extent that management delegate when the model was constructed and implemented the functions. In every organization, the accountants is the quantitative expert, and to retain and improve his status, and also the accountant should be aware of how the mathematical models may improve planning and evaluating the quantitative sources of decision recommendation, as the accountant is usually a member of the top management team in every organization.

       According to Thranf (2014) general stated that a model is defined as a representative of an actual object of situation. A formal decision model measures predicted effects of alternative action. However it is pertinent to note that accounting to the  report of the committees on management decision model may indicate a choice which is rejected by management because of more dominant legal, sociological, psychological, political and other considerations not included in the specific mode is only one input into a more complicated decision model, which include quantitative as well as quantitative dimension.

 

1.2   STATEMENT OF THE RESEARCH PROBLEM

Budgeting is an important tool in business organization some of these organization have budgeting departments which is saddled with the responsibility of preparing budget statement for each unit, department and branches of the organization the department also monitors the execution of the budget estimates with the purpose of ensuring that the budget target is achieved in terms of revenue and that the expenditure does not exceed the estimates, this is the aspect of budgetary control. Not much problem is encountered during during budgeting process; major problems lies in the area of budgeting control, the following problem are usually encountered in the budgeting control.

i.    LACK OF FLEXIBILITY: Some budgets are prepared without adequate flexibility to allow for unexpected situation, which may arise during the budget period they are so fixed and tight that they become an end in themselves rather than a mean to an end, In short, rather than serving as a means of controlling operations, the budget control the manager.

ii.  RESISTANCE TO CONTROL: Some managers regard budgetary control as unnecessarily restrictive and an indirect way of controlling their authority. Rather than seeing budget as a means of improving performance and achieving corporate objective they regard budgeting as a witch-hunting exercise, they adopt a protective stance on their budget center and resist any attempt to bring it into harmony with other centers.

iii.     BEHAVIOUR ASPECT OF BUGETING: The human aspect of budgeting cannot be over emphasized the success of any budget totally depends upon the goodwill and co-operation of the participants without this, budget statement will become merely a paper exercise with no real impact on the operation of the organization.                 

 

1.3   OBJECTIVE OF THE STUDY

The study is aimed at providing general review of investment decision making processes in manufacturing companies this entail how the projects are initiated, enalyed and by whom. Other objectives of the study include:

i.    To find out our cash flow associated with various investment proposal are being estimated.

ii.  To examine the various investment appraisal techniques opened to management of a company.

iii.To determine the effect of taxation, inflation, risk and uncertainty on investment appraisal.

iv. To ascertain whether there is an attributable the critical justification for the use of various investment are achieve or are just a product of some imaginations.

 

1.4   SIGNIFICANCE OF THE STUDY

This study will be most relevant to the management of organization in determine the choice of investment project among various investment opportunities or alternatives and secondly for any decision maker should at his disposal, the  best qualitative and quantitative tool which are available, so that he may establish a frame of reference for the decision  past literature on the research have been too general without going special consideration to the bottling company and in fact, have been too theoretical. The research is therefore intended for use by manager and accountant especially in the bottling industry in implementation of decision-making task in a more efficient manner and also to serve as a pointer to further research on the topic.

 

1.5   RESEARCH QUESTION

In order to guide and direct the study, the following questions were used:

i.    Can budgeting planning, implementation and control be used as an effective tool for revenue generation in a manufacturing company?

ii.  Can proper budgeting implementation and effective control be used to achieve a balanced budget in a business organization?

iii.Can effective budgetary planning and control be used to achieve organizational objective?

iv.  What are the measures taken by the organization when there are variances?

v.   What are the procedures established by the management to ensure that copies of finalized budget are communicated to all staff?

vi. Does budgetary control actually guarantee goods and reliable budget and can it be used to detect budget variance?

vii.       Can late implementation of budget lead to wrong financial decision and loss of revenue.                            


 

1.6   SCOPE AND LIMITATION OF THE STUDY

This research is intended to cover the various cost accounting models used as sources or tools for managerial decision making with participant reference to model that are particular and applicable to the Nigerian bottling company plc, Ilorin as well as its various branches all over the federation.

          This research study would be limited due to time and financial constraints of the Nigerian Bottling Company Plc Ilorin and is hoped that any findings of the research would be applicable to the other branches of the company and the bottling industry in general.

 

1.7   PLAN OF THE WORK

The structure of the research work is divided into five chapters. Chapter one (the introduction) this contained general background to the study (literature review) of the study will shed light on the work of deferent author, researcher in related fields and review of every journal and literature that related  and relevant to the research study. Chapter three (research methodology) of the study will show method of data collections how they are going to be analyzed  and quantified using chi square method brief history of the case- study Nigerian bottling company will be discussed in this chapter. Chapter four (data analysis and presentation) will contain data presentation and analysis with particular reference to the case study Nigerian Bottling Company this chapter will cover the application of every information discussed in chapter two and three on the case study (NBC) of the research work. Chapter five (summary of conclusion and recommendation) which is the last chapter is going to summarize the research work, inferences will be drawn on the research problem under study and based on the conclusions drawn, recommendation will be made to the case-study (Nigerian Bottling Company) of the research problem on what appraisal techniques to use with reason or criteria for choosing such techniques.

 

1.8    DEFINITION OF THE KEY TERMS

        This has been defined to suit the context of this writing in order to avoid certain misconception that may arise.  

A.  Cost; this is the amount if expenditure in carried on or attributable to a specified thing or activity and at the simplest level. A cost is determined by two components (the quantity and the price)

B.  Cost unit; as defined by I.C.M .A, is a quantitative unit of product or service in relation to which cost are ascertained whenever costing is coursed out, the focus is to determine the cost resist of the product or service.

C.  Cost Allocation; this is the changing of discrete and identification of item of cost center of cost unit. It is the allotment of whole item of cost to center or cost unit that is responsible fort its authorization.

D. Cost Ascertainment; This the identification of the right or appropriate cost a factory is N70000, or the what is cost to pay the nurses salary, it may be 25000 or the word cleaners may receive 15000 and  doctors receive 35000.

E.  Cost Absorption; it also refers to cost that has been a cost center by either allocation or apportionment and absorbed into cost unit.

F.  Cost Apportionment; This is the process of sharing commonly incurred expenses proportionately where two or as more cost center are involved, based on the amount of benefit each cost center derived from it.

G. Cost Control; This is an act of making necessary adjustment after comparing the actual cost with a standard a targeted cost. Where the actual exceeds the targeted cost a reduction in cost may become necessary.

H. Costing Center; as defined in the terminology it is a location, person or times of equipment in respect of which cost unit for control purpose.

I.    Cost Code; According to I.C.M.A is s system of symbol designed to applied to a classified set of item to gives a brief accurate reference facilitating entry, collation and analysis. The symbol may be mainly series of numbers or alphabet or mature of both.

J.  Fixed Cost; this is a cost that does not change with the change with the change in the level of activity. It remains static over a period of time. Unaffected by variations in the level of activity and volume of product.

Variable Cost; this is also changes in the level of change in activity. Any increase or decrease in the volume of production result in a proportionate change in cost.



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