THE SIGNIFICANCE OF COST ACCOUNTING IN THE MANAGEMENT OF BUSINESS
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TABLE OF CONTENTS
Table of contents
- Objective and purpose of the study
- Significance of the study
- Scope and limitation of the study
- Organization plan of study
- Definition terms and concepts
- Literature Review
- Meaning of Cost Accounting
- Method of costing
- Cost Accounting and Planning
- Cost Accounting and Controlling
- Cost for Business and Organization Survival
- Cost Accounting as an Aid to Survival of an Organization
- Cost Accounting as an Aid to Profitability
- Cost Accounting as an Aid to Management of an Organization
- Labour as an aid to control cost
- Research Methodology
- Research Design
- Sources of Information
- Research Population Method of Data Collection
- Sampling and Limitation of Data Collection
- Data Presentation, Analysis and Interpretation
- Brief History of Nigeria Bottling Company Plc
- History of the NBC Ilorin Plant
- Management of Business Organization
- Hypothesis Testing
- Opinion test or Comparison
- Summary, Conclusion and Recommendation
The role of cost accounting cannot be over emphasized as it is needed to assist the management in planning, controlling and organizing the business activities in order to achieve its objectives.
Ever since the use of money replaced barter, people have been concerned with costs. However, it was the concentration of manufacturing facilities in the factories which gave impulse to the development or recognizable costing systems. On the other word cost accounting is probably the field of account which has developed most within the half – century and there can be no doubt its growing importance. This is partly a reflection methods which results in greater capital investment and higher proportion of indirect costs and partly a reflection of growing completion and widening markets. All these factors necessitate the keeping of systematic and accurate records which will show the cost of goods produced.
There is constant level of activities in any industry engaged in manufacturing and sales of products manufacturing industries are made up of different sections in which people are continuing toward changing the form of raw – material in order to supply the customers with desirable product.
In addition, the highest level of management should receive management reports on various aspects operation to show actual results against estimates or projections. This will enable to management to know whether things are not moving as planned and to make necessary corrective measure or obtain on time or otherwise to adjust its plans.
Costing is a scientific tool in management; it involves the classifying recording and allocating expenditure for the determination of cost of production and services and the relation of these costs of the scale value and the determination of profits. Costing enable a business not only to find out what various jobs or processes have costs, it indicates where losses and waste are occurring before the work is finished and there immediate action may be taken, if possible to avoid such loss or waste.
1.1 OBJECTIVE AND PURPOSES OF STUDY
The primary objective of this study “ Cost accounting significance to the management” is to show people in the management hierarchy and all person s concerned and interested on how cost information can be used as an aids to planning, controlling, profitability, decision making and survival of business organization within the frame work of the manufacturing concern.
It is also desired that management should be provided with a basis for pricing policy for which it may require information with regard to margin cost or the calculation of the “ break-even points”.
In a nutsh ell, the study intend to make a review assessment and analysis to the r effective and efficiency management of business organization as well as a critical analysis of costing with a view to spoil using problems in the implementation and possible solution .
It is hope that this project work will be of importance not only to the case study, but generally all organization and to the student in various schools of business administration and management who may come across it.
- SIGNIFICANCE OF THE STUDY
Due to the constant increase in the size of the business organization, these organization demand costing system for example cost accounting helps in indicating to the management any inefficiencies and the extent of various forms of waste whether of materials, time and expenses or in the used of machinery, materials, time and expenses or in the use of machinery , analysis of the causes of unsatisfactory result may indicate remedial action.
Meanwhile, the main significance of this project is to provide information and understanding on the use of information the cost accounting provides on the affairs of the company and how it serve as aid to management of business organization.
- SCOPE AND THE LIMITATION TO THE STUDY
Cost accounting is generally considered or seen as being applicable only to the manufacturing operation alone, this should not be the case . All kind of activities, regardless of the size in which monetary value is involved should consider the use of cost accounting techniques and concepts.
Cost accounting of any organization is the foundation of the internal financial aspects of performance is provided by the cost system.
In this project, the significance of cost accounting to the management will be considered within the frame work of manufacturing concern alone, that is the study will be carried out in Coca-Cola ( Nigeria Bottling Company) Ilorin Branch. Therefore, the geographical limit is intended to be at Ilorin Branch only.
Despite the limitation, it is hoped that the study will serve as a good, supplement to the contribution made by various authors of cost accounts.
- ORGANIZATION PLAN OF STUDY
The study is structured to five chapters
Chapter one: it contains the introductory part of the study, the objective and purpose of the study, scope and limitation, the significance of the study and lastly the basis terms and concepts.
Chapter two : contain the review of relevant literature, such as textbooks, journals and periodic publication on the on the research topic.
Chapter three: It entails the brief history of the case study, re search design and historical background of Ilorin Branch of coca- coal company, the source of information used, method of data collected for the research and sampling and limitation of data collected.
chapter four deals with the management of business organization justification of cost accounting in business and presentation and analysis of the data collected form the case study. And finally.
Chapter five contains the summary of findings, the conclusion and the recommendation.
- DEFINATION OF TERMS AND CONCEPTS
PLANNING: In all organization, planning is the first and perhaps the most important function of management. It is the process by which the managers set the business objective and look into future to discover them. Planning is necessary at all managerial level in organization.
CONTROL: This is the process assuring efficient use of organizational resources and achieving their goal. It is also seen as process that guifde activities towards some pre-determined goal.
MANAGEMENT: Management is the act of getting things done through people involving decision –making. This definition call the attention to the fact that managers need to achieve the organization goal by arranging for other to perform whatever task may be necessary not by performing the task themselves.
COST ACCOUNTING: This is a quantitative unit product or service in relation to which costs are ascertained or expressed.
COST CENTRE: This is a location, person or items of equipment in respect of which cost may be ascertained and related to cost unit for control purposes.
COST CODE: A system of symbols designed to be a applied to a classified set of items, to give brief accurate reference facilitative entry, collection and analysis.
COST CONTROL: This is the application of appropriate costing techniques to enable management compare actual cost with planned cost and take necessary action in case of unfavourable trend.
LABOUR COST: This is the cost of effort contributed by the employee towards production. Direct labour cost is the remuneration of employee’s efforts and skills applied directly to a product of saleable in product costs.
COST BEHAVIOUR: This refers to the way in which cost vary with the level of output and activity in the organization , the level of activity is refers to the amount of work done or number of work that have occurred .
COST ESTIMATION: This is the term used to describe the measurement of historical cost with a view of helping in prediction of future cost of management’s decision making.
MATERIAL COST: The cost of commodities applied to an undertaking.
EXPENSES: The cost of services provided to an undertaking and the national cost of owned assets.
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