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THE ROLE OF COST ACCOUNTING INFORMATION IN MANAGEMENT DECISION MAKING” WITH GUINNESS NIGERIA PLC

  • Type:Project
  • Chapters:5
  • Pages:86
  • Methodology:Chi Square
  • Reference:YES
  • Format:Microsoft Word
(Accounting Project Topics & Materials)
THE ROLE OF COST ACCOUNTING INFORMATION IN MANAGEMENT DECISION MAKING” WITH GUINNESS NIGERIA PLC,
CHAPTER ONE

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.
1.3    HISTORICAL BACKGROUND OF THE STUDY
Guinness Nigeria Plc was incorporated  in Nigeria in the year 1962 at Ikeja Lagos State, it has a branch in Benin City, which was opened in 1972.
The original name when incorporated was Guinness Nigeria Limited. It was changed to Guinness Nigeria Plc due to government directive to distinguish public Limited Liability Companies  from other Limited Companies. Guiness Agbor Road on Oregbemi Housing Estate Ikpoba Hill Benin City. It is very close to Bendel  Brewery Limited. The objective of the company are:
i.    To provide employment opportunities for members of the community.
ii.    To contribute to the general welfare of the community
iii.    To contribute to the economy development of the economy, of the nation.
iv.    To generate profit
The company has a total staff of two thousand and fifty full time and with an additional three hundred causal workers employed on daily pay basis. However, seventy-nine people are in the senior management level. It is not worthy to understand that expatriates from time to time come to the company to offer technical and management advice  particularly when a product is to be introduced into market. Sixteen members make up the board of directors.
1.4    STATEMENT OF PROBLEM
The growth of the business activities in production process and information precision to aid management in taking timely accurate and effective decision has brought out the need for an appropriate cost accounting system will meet the need of the organization entity, when an appropriate system is installed output is increased, efficiency and profit maximization is recorded.
Therefore, the study aims to highlight the role of cost accounting system with particular reference to Guinness Nigeria Plc.
1.5    OBJECTIVE OF THE STUDY
i.    To help management in improving and controlling of stock taking.
ii.    To aid management in decision making when planning
iii.    To reduce cost of production process
iv.    To help management in determining selling price in order to maximize profit.
v.    To ensure production and marketing flow smoothly
1.6    RESEARCH HYPOTHESIS
The hypothesis of the research is divided into two known as: Null (Ho) alternation and alternative (H1) the hypothesis which were null hypothesis were rejected then, the alternatives is accepted vise versa.   
The hypotheses to be tested are
1.    H1: Cost accounting forms the basis for preparation of financial statement.
H0: Cost accounting does not form the basis for preparation of financial statement.
2.    H1: Cost accounting helps to increase earnings in the organization
H0: Cost accounting does not help to increase earnings in the organization
3.    H1: Cost accounting is relevant in management decision making
H0: Cost accounting is not relevant in management decision making
1.7    SCOPE OF THE STUDY
Due to time constrain this study will be limited to those area that are necessary for the purpose of investigation. Hence, the role of cost accounting and cost system or techniques will be covered, this study focuses on the cost accounting department of Guinness Nigeria Plc Benin City.    
1.8    SIGNIFICANCE OF THE STUDY
The significance of the study is to be able to ascertain the roles of costing system in an organization overall performance. Its specific contribution is to the efficiency in production processes. It will enable management to know the importance to costing system this will enable then to look at the purchase department with seriousness in nay organization in which it is found.
This project will also be important to the government to scarce resources and for the standard who are interested will be equipped now on the understanding of cost system.
1.9    LIMITATIONS OF THE STUDY
Study of this nature requires consideration amount of time to explore all appellant of costing system in the organization, under study but time and company regulation were limiting factors to the area that could have been conveniently and consistently covered.
1.10    DEFINITION OF TERMS
Cost: It is the value of economic resources used as a result of producing or doing things being coasted, it can also be defined as the unit of expense incurred on or attributed to specific thing or activity.
Cost unit: It is a unit of quantity of product service or time in relation to which cost may be ascertained or expressed.
Cost centre: according to W.M. HSRPER, any part of an enterprise to which cost may be changed is called cost centre.
Cost conversion: it is the term used to describe the cost of converter purchased material into finished or semi-finished product; it is thus total production cost minus initial material input cost.
Added value: is the increase in the market value of product excluding the cost of bought materials and services.  
Cost allocation: is the paid of cost attribution which shares cost among two or was cost centers or cost unit in proportion to the estimated benefit received using a proxy e.g square meter.
REFERENCES
Okoye A.E. (1997), Cost Accounting Management Operational Application, United City Press.
Lonis E.B. (1980), Principle of Management, 2nd Edition, New York, Random House Incorporation.
Drury C. (2008), Management and Cost Accounting, Book power.
Hoingern C.T. (1979), Cost Accounting A. Managerial Emphasis, New Jersey, Prentices Hall Inc.  

THE ROLE OF COST ACCOUNTING INFORMATION IN MANAGEMENT DECISION MAKING” WITH GUINNESS NIGERIA PLC

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Details

Type Project
Department Accounting
Project ID ACC1655
Price ₦3,000 ($9)
Chapters 5 Chapters
No of Pages 86 Pages
Methodology Chi Square
Reference YES
Format Microsoft Word

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    Details

    Type Project
    Department Accounting
    Project ID ACC1655
    Price ₦3,000 ($9)
    Chapters 5 Chapters
    No of Pages 86 Pages
    Methodology Chi Square
    Reference YES
    Format Microsoft Word

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