TABLE OF CONTENTS
CHAPTER
ONE
1.1
INTRODUCTIONS
1.2 STATEMENT OF RESEARCH PROBLEM
1.3 OBJECTIVE
OF THE STUDY
1.4 STATEMENT OF HYPOTHESIS
1.5 RESEARCH METHODOLOGY
1.6
PLAN AND ORGANIZATION OF THE STUDY
CHAPTER
TWO
2.0 LITERATURE REVIEW
2.1
THE COST VOLUME PROFIT ANALYSIS (CVP)
2.3
ARITHMETIC OF COST VOLUME PROFIT ANALYSIS
2.3.2
MARGIN OF SAFETY
2.3.3
PROFIT VOLUME CHART FOR MULTI PRODUCING FIRM.
2.3.4 RELEVANT RANGE CONCEPT
2.4
COST VOLUME PROFIT ANALYSIS IN A MULTI. PRODUCT FIRM
2.5 PROFIT PLANNING AND FORECASTING
2.6
EVALUATION PROPOSALS AND SEGMENT OF THE BUSINESS
2.7
PRICING AND SALE VOLUME DECISION
2.8 COST REDUCTION
2.9 SALE MIX DECISION
2.10
SIMPLE DEVICE TO UNDERSTANDING ACCOUNTING DATA
2.11
USEFUL DIAGNOSTIC TOOLS
2.12
BASIC INFORMATION FOR FURTHER PROFIT IMPROVEMENT STUDIES.
2.13
LIMITATION OF CVP ANALYSIS
CHAPTER
THREE
3.1
POPULATION UNDER STUDY
3.2
SAMPLES UNDER STUDY/SAMPLE SIZE
3.3 INSTRUMENT OF DATA COLLECTION
3.4
METHOD OF DATA ANALYSIS
3.5
LIMITATION OF THE STUDY
ANALYSIS
DATA
3.7
HISTORICAL BACKGROUND OF CASE STUDY
CHAPTER FOUR
DATA
PRESENTATION AND ANALYSIS
4.1
INTRODUCTIONS
4.2
DATA PRESENTATION AND ANALYSIS
4.3
DISCUSSION FINDING
CHAPTER FIVE
SUMMARY,
CONCLUSION AND RECOMMENDATION
5.1 SUMMARY OF FINDING
5.2
CONCLUSION
5.3 RECOMMENDATION
REFERENCES
CHAPTER
ONE
1.1
INTRODUCTIONS
Cost
volume profit analysis is a systematic method of examining the relationship
between changes in volume (i.e.) output and changes in total saves, revenue
expense and net profit. As a model of these relationships cost volume profit analysis
simplifies the real word condition that a firm will face like model which are
abstraction from reality. Cost volume profit analysis is subjected to a number
of underlying assumption and limitation.
Profit
is the important measure of a firm performance in the free market economy:
profit is a guide for allocating resource affectively on analysis of the effect
of various factors on profit is an essential step in financial planning and
decision. Making. The analytical techniques used to study the behaviours of
profit in respond to the changes in volume, and prices are called cost volume
profit analysis (CVP). However. It should be noted that formal profit planning
and control also involves the use of budgets and other forecast. As a starting
point in profit planning, cost volume profit analysis helps to determining the
minimum sale volume to avoid losses and the sales volume at which the profit
goal of the firm will be achieve.
Therefore,
the survive in today business world as started by outer and brown (1984)”concealed
in efficiency have to be tracked down, standard set.
Forecast
made and rigorous control must be started to ensure even modest margin of
profit. The efficiency and effective management the variances of cost.
Price,
output (volume) and ultimately profit will play major determination roles in
the growth and survival of an organization. The break-even point is that point
of activity (saves volume) where total revenues and total expenses are equal.
It is neither profit nor less point. The break-even point can only be archive
where there is decision involves price, volume and cost that can be split in to
two classifications. Cost volume analysis is the analysis techniques used to
study the behavior of profit in response to the analysis techniques used to
study the behavior of profit in response to the change in volume, cost and
price, it is a device used to determine the usefulness of the profit planning
of the firm in the short term.
Cost
volume profit analysis sometimes termed break-even analysis is an application
of marginal costing and seeks to study the relationship between cost volume and
profit at different activity levels and can be useful guides for short term
planning and decision making. It is more relevant where the proposed changes in
activity are relatively small so that established cost patterns and
relationships are likely to hold good, will greater changes in activity and
over the long term existing cost structure of the amount of fixed cost and
marginal. Cost per unit are likely to change so cost volume profit analysis is
unlikely to produce useful guidance
1.2 STATEMENT OF RESEARCH PROBLEM
The focus of the research is to identify the
importance of cost volume profit analysis in manufacturing company with
emphasis on Nigerian bottling company Ilorin plant. Hence in the course of the
study effort has been made to find solutions to the following research problem.
1.
For budget planning – it is used to determine
the volume of sales required to make profit
2.
A target profit levels and to determine the
margin of safety
3.
Determining product pricing and sales volume
decisions
4.
For determining optimum production and sales
mix
5.
To determining the importance of capacity
utilization on cost.
1.3
OBJECTIVE OF THE STUDY
The
study has examined the importance of cost volume profit analysis in
manufacturing industry in Nigeria. Due to the role of cost volume profit
analysis which play in the effectiveness and efficiency management of a
business enterprise. The aims and objective of the study are:
i.
To examine the introduction of cost volume
profit analysis in Nigeria
ii.
To highlight the reason for the introduction of
cost volume profit analysis in Nigeria.
iii.
To critically examine the likely problems for
cost volume profit analysis in Nigeria.
Limitation
did not hinder effective completion and quality of the research work.
1.4 STATEMENT OF HYPOTHESIS
The general hypothesis that was tested
in the course of the research is as follow:
Ho:
the importance of cost volume profit analysis does not improve manufacturing
industry service delivery.
1.5 RESEARCH METHODOLOGY
Base on the topic of research, made
use of both primary and secondary source of information. Primary source which
include case study material from internets response from questionnaire while
secondary source include text books.
1.6
PLAN AND ORGANIZATION OF THE STUDY
The research work has been divided
into five chapter one contain the introduction and background of the study.
Statement of research problem, aims and objective of the study, scope and limitation,
statement of hypothesis, research methodology and plan and organization of the
study.
Chapter
two treats past and current literature review cost volume profit analysis,
assumptions underlying CVP analysis, arithmetic of cost volume profit analysis,
contribution theory, margin of safety, profit volume chart for multiproduct
firm, relevant range concept, cost volume profit analysis in a multiproduct
firms profit planning and foresting, evaluation proposals and segment of the
business, pricing and sales volume decision cost reduction, sales mix decision
simple device to understand accounting data, useful diagnostic tools, basic
information for further profit improvement studies, limitation of CVP analysis
chapter three treats brief history of the case study (Nigeria bottling company
Ilorin plant) method of data collection, instrument of data collection type and
sources of data, sample under study simple size and population under study.
Chapter
four discusses data presentation and analysis discussion findings.
Chapter
five contains summary of finding conclusion and recommendation.
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