APPRAISAL OF PROCESS COSTING SYSTEM IN MANUFACTURING COMPANIES IN NIGERIA A CASE STUDY OF NIGERIA BOTTLING COMPANY (NBC), PLC ILORIN, PLANT

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Product Code: 00003134

No of Pages: 51

No of Chapters: 5

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TABLE OF CONTENTS

TITLE PAGE                                                                           

CERTIFICATION                                                                   

DEDICATION                                                                        

ACKNOWLEDGMENT                                                           

TABLE OF CONTENTS                                                         

CHAPTER ONE

1.0    General Introduction                                         

1.1    Aims and Objective of the Study                       

1.2    Problem of the study                                         

1.3    Brief Historical Background of the case study         

1.4    Scope and Limitation of the study          

1.5    Definition of Terms                                   

CHAPTER TWO

2.0    Literature Review                                     

2.1    Definition of Process Costing                            

2.2    Classification of Cost                               

2.3    Elements of Cost                                      

2.4    Objectives of Process Costing                           

2.5    Procedure for Process Costing System            

2.6    Characteristics of Process Costing         

2.7    Advantages of process Costing System            

2.8    Limitation of Process Costing                           

2.9    Functions and duties of Cost Department       

2.10  Roles of Cost Accountant                        

CHAPTER THREE

3.0    Research Methodology                                      

3.1    Research Design                                      

3.2    Data Collection Instruments                             

3.3    Primary Source of Data                                     

3.4    Secondary Source of Data                       

3.5    Population                                                

3.6    Sample Size                                              

3.7    Sampling Technique                                

3.8    Validity and Reliability of Data                         

3.9    Statement of Research Hypothesis                   

 

CHAPTER FOUR:

4.0    Presentation and Analysis of Data          

4.1    Questionnaire                                          

4.2    Presentation and Analysis of Data and Research Question

4.3    Presentation and Analysis of Data and Research Question        

 

CHAPTER FIVE

5.0    Summary                                                  

5.1    Conclusion                                                         

5.2    Recommendations                                             

5.4    Suggestion for Further Researcher                            





CHAPTER ONE

1.0   GENERAL INTRODUCTION

1.1   BACKGROUND OF THE STUDY

No doubt that for any manufacturing company to grow easily, there must be as way to process their cost in order to achieve the organizational objectives.

Management needs a variety of information to plan for the future activities, assist in the measurement of efficiency and effectiveness in essence of machine, men, materials and money ton control and to make decisions. Information regarding the financial aspect of performance in any organization is provided by the costing system. Cost per unit of running a section, department or factory, wages costs for unit of production or per period of production, scrap or rectification cost, behavior with varying levels of activities and so on are provided by costing system.

Ever since the use of money replaced barter, it is the concentration of manufacturing facilities into factories that give impetus to the development of recognizable costing system. The early developments were almost entirely related to manufacturing concerns but today costing is used very widely in the hospitals, transport undertakings, local authority offices, and banks as well manufacturing companies.

 

1.1 AIMS AND OBJECTIVE OF THE STUDY

i.        To examine the effect of cost system in the quality of the product of the company.

ii.       To examine the effect of cost system on the production of the organization.

iii.      To examine the significance of cost system control in the price to NBC profits.

 

1.2   PROBLEM OF THE STUDY

The main characteristics of manufacturing firms are that obtain raw materials and component and convert them into finished goods ready for sales. The problem arises as to how to account for the cost of these products. Problem also arises as to determination of the value or worth of raw materials and work inn progress at each process.

1.3   BRIEF HISTORICAL BACKGROUND OF THE CASE STUDY

Nigeria Bottling Company came into existence on 8th May 1886, Late A.G Leventis founded the company and was the first in this country to be offered franchise by an international “Soft drink firm”. The first plant which was sited in Lagos went into operation in March 1953. Coke was the first soft drink to have its own designed shaped bottles, which was different from the company, went public by the issue of 372,500 ordinary shares of 50kobo each. This was in compliance with the Nigerian Enterprise promotion Decree of 1972.

Some years after the Ibadan plant was opened (through later shut down due to non-availability of good water in Ibadan metropolis) that of Port Harcourt was established and many others followed of which Ilorin plant came into existence in April 1979 so as to be able to meet the demands of the customers in the region. Ilorin plant was mainly established to meet the needs of the people in Bida, Jebba, Ogbomosho, Okene, Osogbo, Kontagora, Ijagbo, Offa, Lokoja and Ilorin metropolis. The plant has 8 managers.

The ranges of soft drink bottled by Nigerian Bottling Company Ilorin plant include Fanta Orange, Coke, Sprite, Krest, Bitter lemon, Ginger Ale and Eva water. In terms of sales the company enjoys a wide acceptance of its products.

Quality is the key word which determines the success of the whole operation only the best ingredients are used for the making of their soft drinks and sophisticated washing and filling equipment have been installed at all part. Extremely high standard of hygiene are maintained are maintained to ensure that tip quality product reach their customers. Ranging Nigeria Bottling Company as a whole its performance is highly appreciated.

 

1.4   SCOPE AND LIMITATION OF THE STUDY

The study intends to appraise eh process costing system in the manufacturing company as a whole with reference to NIGERIAN BOTTLING COMPANY (NBC) COCA-COLA ILORIN PLANT.

Manufacturing Company as a whole have little or no different in their costing system, hence effort will be made to pay s significant attention to the various accounting books and records most particularly the one involving cost kept by NIGERIA BOTTLING COMPANY (NBC) COCA-COLA ILORIN PLANT. The study will be restricted to the worker in the manufacturing mangers in the organization. However, the major constraints in the confidentiality over certain vital documents which the company may not be willing to release for the fear of getting to the hand of the competitors cost for a broader and effective scope of the study is also a limiting factor. Therefore conducting the research in many materials that the researcher cannot afford, the researcher will also combine this study with academics work simultaneously.

1.5   DEFINITION OF TERMS

·        Cost Accounting: The application of costing and cost accounting principles, methods and techniques to the science art practice of cost, control and ascertainment of profitability.

·        Process Costing: Is a type of costing system that is used for uniform or homogeneous product.

·        Cost: The amount of expenditure (actual or national) incurred on or attributed to a specific thing or activity.

COSTING

·        Cost Objective: Any activity for which a separate measurement of cost is ascertained.

·        Cost Unity: A quantitative unit of product or service in relation to which cost are ascertained.

·        Cost Centre: A production or service location, function activity or item of equipment for which cost are accumulated.

·        Production Cost Centre: A cost centre in which production is carried on.

·        Actual Cost: (historical cost): These are amounts determined on basis of cost incurred as distinguished from produced or forecast costs.

·        Cost Allocation: This is cost that can be directly identified or charged with a cost centre.

·        Cost Apportionment: This is the division of cost among two or more cost centres with a presumed basis of apportionment.

·        Overhead Absorption: This is a means of including overhead as part of the cost of production using a predetermined rate.

·        Conversion Cost: The term is used to described the cost of converting purchased materials into finished or semi finished product.

·        Value Added: This represents the worth of an alternation inform, location or availability of a product or service.

·        Coding: A system of symbols designed to be applied to a classified set of items to give a brief references facilitating, entry, collation and analysis.

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