Our Blog

List of recently published project topics and materials

Project Topic- ROLE AND EFFECTS OF COST AND MANAGEMENT ACCOUNTING IN MANUFACTURING INDUSTRY A CASE STUDY OF UNILEVER PLC ABA, ABIA STATE

Project Topic- ROLE AND EFFECTS OF COST AND MANAGEMENT ACCOUNTING IN MANUFACTURING INDUSTRY A CASE STUDY OF UNILEVER PLC ABA, ABIA STATE

Abstract

This project work studies the role and effect of cost and management accounting in manufacturing industries. Unilever Nigeria Plc Aba branch, Abia State was used as a case study for this work. The researcher sought out the view of other scholars on “What role does cost accounting play on the management in manufacturing industries?” In the same vein, some institutional definitions of accounting and what could be referred to as purpose of cost accounting in decision making was treated. Thus, the objective of the work is to investigate the extent to which the cost and management account influence management decision making in production industries. In executing the study, data were collected through both primary and secondary sources and were analyzed accordingly and thereafter validated using two stage regression analysis statements, which were with the “x” and “y” distribution. The findings made include that management relies on cost accounting information for decision making and that cost accounting information is an indispensable tool for management decision making process. The work recommends that management should first and foremost recognize what its role is in an organization and the organizational objectives it wishes to pursue, there should be proper and adequate maintenance of accounting records as a management process; and the qualitative and skilful staff should be engaged in the accounts department of Unilever Plc to handle accounting work effectively.

Chapter one

Introduction

  • Background of the study

Accounting is known as a language that communicate economic information to people who have interest in an organization. For any organization to achieve its main objective, accounting information is required for a variety of reasons. Hence, it is essential that a sound system of recording and classifying this information be established. This according to the American Accounting Association defined accounting as the information that promote informed

judgement and decision by users of such information. According to Owler and Brown (1984:74) cost is constantly needed in business for the purpose of assisting what to determine or to measure and ascertain the efficiency of a department or operation as well as assist management in deciding between alternatives. However, Enthoren (1994:38) saw accounting as “the identification, selection, analysis, measurement and communication of information

in form of cost and benefits both a direct and indirect nature to facilitate economically justified decision regarding the activities and resources of an organisation”. On the same vein, the Institute of Cost and Work Accountants of England and the Anglo American Council on productivity defines management accounting as the presentation of accounting information in such a way as to assist management in the creation of policy and decision in the day to day

operation of an entity. The cost and management techniques employed here is however, by no means only confirmed to manufacturing industries. However, the feedback information is required for controlling the implementation of decision required at all levels for the following purpose;

  1. Formulating the policies of the organization.
  2. Planning the activities of the organization in both long, medium and short terms.
  • Controlling the activities of the organization.

Costing techniques are applied effectively in such diverse organizations such as companies, soap industry, retail store, hospital, local government, schools, etc. One the other hand, this management accounting can be said to be concerned mainly with the provision and interpretation of information meant to assist executives in fulfilling and accomplishing organizational objectives.

It also serves a dual purpose of providing information for internal reporting to the manager for use in planning and controlling routine operations. Internal reporting to managers in making routine decision and in formulating major plans and policies. It is a truism to state that cost accounting plays a crucial role with the establishment of budgets, standard costs and actual cost of operations processes, activities or products, the analysis of variances, profitability

or the social use of fund. It also deals with cost accumulation for stock valuation to meet the requirement of external reporting and analysis of variance. Cost accounting had a major role to play in the management of manufacturing organization because it deals with calculation of producers’ cost for use in the financial accounts. Costing is the process of determining the cost of doing something. The cost of manufacturing an article, rendering service or performing a function, the article manufactured, service rendered is termed as the objective of costing. Therefore, cost objective is any activity for which a separate measurement of cost is desired.

Cost objective are divided into three broad categories;

  1. Cost for stock valuation
  2. Cost for decision making and
  • Cost for control purposes.

However, a typical cost collection system account for cost in two broad stages.

  1. It accumulates cost by classifying them into certain categories such as labour, material and overheads cost.
  2. It also traces these cost for cost objectives.
  • Ascertainment of product cost.

  1. Enhancement of management decision.

In fact, the cost accounting system of any organization (manufacturing) is the foundation of internal financial information system. Hence, management account uses the information produces by cost accountant to make decisions on the production. In most cases the usefulness of costing information is enhanced when the actual results and costs are compared in some targeted or standard figures.

In general, it would be seen that there are similarities between the objectives of both management and cost accounting. in practice, there is no true dividing line. Both management and cost accounting are concerned with the provision of information (often in great detail) for internal planning, control and decision making purpose with considerable emphasis on the cost functions, activities, processes and product. For instance, the cost of distribution of local products to where they are constantly needed and that of the personal function who are responsible for the distribution of such goods or services, etc.

  • Statement of problem

Though the role of management and cost accounting cannot be over emphasized in the decision making via costing of products, material purchase in the manufacturing industries, the problem of the study is to investigate on the role and effects of cost and management accounting to manufacturing organization with a particular reference to Unilever PLC Aba. Cost accumulation is necessary to determine in any manufacturing development.

Despite all its usefulness, it also has some short-comings which constrain its success. Often information derived from management accounting is not always practicable in the manufacturing industries because of its inconsistency in application. Entrepreneurs in Nigeria still find it difficult to apply cost and management procedures in production process. In pricing, prices are determined by cost of production.

However, in profit planning, manufacturing industries plan their sales, cost their activities level and complete necessary costing method which should be adopted by the organization. Consequently, it is imperative to summarize the problems as follows:

  1. The problem of poorly designed costing techniques in manufacturing industries.
  2. The effect of faulty prepared report statements and analysis produced by cost accountant to achieve organizational goals.
  • The effect of under costing and over costing of products in the organization.
  1. Problem of inadequate personnel with adequate knowledge of management accounting in production environment.
  2. Lack of infrastructures and equipment which help to obtain the most accurate information and reports e.g. computer installation in industries, etc.
    • Purpose of the study

Based on the problems above, this study strives to achieve the following objectives:

  1. To investigate the role and effects of cost and management accounting to manufacturing industries.
  2. To investigate whether poorly designed costing techniques will or not contribute to the achievement of the organization goal.
  • To investigate whether report and statement prepared at an appropriate time aids management decision-making.
  1. To investigate whether over costing and under costing of products hinders organization profit.
  2. To investigate find out the effect of cost accounting in the management manufacturing establishments.
  3. To investigate the measures to adopt by the manufacturing industries in order to achieve their designated goals.
  • To examine the effect of cost management on investors willingness to take up long term decision.
    • Significance of the study

The main purpose of carrying out a research work is to get more reliable and up-to-date fact about the problem confronting the entire work. The significance of this study in the manufacturing industries (Unilever Plc, Aba) is to ascertain the method of cost accounting in the management as regards the role of cost accounting in the management of any organization precisely manufacturing organization.

Again, it is also to ascertain how effective use of cost information for planning, control and decision making in the industry and at the same time to consolidate some of the factors facing the manufacturing industries. The product of the study would definitely extend its purpose to the library where a copy would be kept as one of the institution’s library materials.

The research will also give the researcher the opportunity to compare and contrast variables in cause of carrying out the study and also the result will provide the users, both internal and external users, information and importance of a properly applied cost and management accounting in the organization. In fact, this work on completion will add to existing literature in this discipline and it will benefit governments, scholars, researchers, investor operators as well as the general public.

Research questions

To carry out this research study, some research questions were formulated, namely:

  1. To what extent does the costing system affect the organization in their method of rendering services or production of goods?
  2. To what extent does the reports statement and analysis produced by costing system contain the relevant information needed for the achievement of the organizational goal.
  • To what extent are these reports and statements effective when prepared at an appropriate time for proper decision making?
  1. To what extent are the information produced in a relevant form to a sufficient degree of accuracy important for intended purpose?
  2. To what extent has the implementation of costing techniques helped producers of goods?
  3. What are the major obstacles in implementing the use of cost accounting in manufacturing industry.

ROLE AND EFFECTS OF COST AND MANAGEMENT ACCOUNTING IN MANUFACTURING INDUSTRY A CASE STUDY OF UNILEVER PLC ABA, ABIA STATE
 Statement of hypotheses

In this research work, the following hypotheses will be tested for validation or rejection. This will lead to some of the effects on the application of cost and management accounting in the manufacturing environment. The research question can be tested on the basis of null and one alternative hypothesis. Therefore, the researcher declares thus:

H0:    Well-designed costing system does not appropriately affect the organization the way services are provided and goods manufactured.

1:    Well-designed costing system appropriately affects the organization the way services are provided and goods manufactured.

H0:    Reports statement and analysis produced by costing system does not contain relevant information, which help to the achievement of the organization goal.

H1:    Reports statement and analysis produced by costing system contain relevant information, which help to the achievement of the organization goal.

H0:    Information prepared in a relevant form and to a sufficient degree of accuracy does not contribute to the achievement of the intended purpose.

H1:    Information prepared in a relevant form and to a sufficient degree of accuracy contributes to the achievement of the intended purpose.

H0:    Reports and statements are not effective if produced within an appropriate interval and early enough.

H1:    Reports and statements are effective if produced within an appropriate interval and early enough.

Delimitation and limitation of study

There are many limitations that could be encountered in the course of this research. As the saying goes “Nothing good comes easy”, certain factors militated against the smooth completion of this work, they include,

  • Non-existence of data required from appropriate source, and uncooperative attitude of some of the respondents.
  • Unfriendly behaviour of some staff of institutions where data would be gotten.
  • Time was also a big threat to this study. The researcher had to apportion this limited resource between the usual academic lectures and research project.
  • Finance was another factor that could have put this work to a halt. Money was needed to offset expenditure like transportation fee, purchase of writing materials and photocopying of relevant materials.
  • Generally, nonchalant attitude of some of the manufacturing industries in fear of divulging the material information about their affair because if they open up enough there secret will expose them to great danger. Bearing this in mind this research would be limited to second semester 2007 academic session. It is also limited to the application of cost and management accounting in Unilever Plc. Aba, Abia State.
    • Research method

Research design for the achievement of research objective. A research method is comprehensive data collection plan whose purpose is to answer research questions and test research hypotheses. In the area of data collection method adopted in gathering data include, oral interview, review of company’s financial and other records and other secondary data. For the sake of this study, the following hypotheses were adopted.

H0:    Well-designed costing system does not appropriately affect the organization the way services are provided and goods manufactured.

H1:    Well-designed costing system appropriately affects the organization the way services are provided and goods manufactured.

Consequently, one of the problems associated with this kind of study is that most of the conditions and variables never always remain constant. Based on the type of data and analysis adopted, two stage regression analysis which express the relationship between two or more variables were adopted.

Test of hypothesis, 5% significance level

Formula,

A = (Σy- Σx)/n

B = (nΣxy- Σxy- Σx Σy/n Σx2-(Σx)2

Where        n       = 5

                   xy      = 360.294

                   x        = 2.04

                   y        = 892.4

Therefore, hypothesis tested for rejection or validation will lead to some of the effects of the application of cost and management accounting in the manufacturing industries.

Definition of terms

This section defines some of the terms which we regard as being central to the study at hand.

Costing ACCOUNTING

The process of collecting, summarizing, analyzing and reporting in monetary (financial) terms tailor made information to management, showing the cost and benefits of pursuing each alternative course of action open to management for decision making.

Management ACCOUNTING

This deals directly with the analysis of the activities and projected activities for the purpose of advising management on the best course of action in order to achieve optimal decision.

Manufacturing industry

This is a unit of firm that converts raw materials into finished or semi-finished products for consumption.

Cost

Money sacrificed for the incurring of liability in the pursuit of the business.

Standard costing

This is the scientifically predetermined cost of manufacturing a single unit or a number of units of products or of rendering a service during a specified future period.

Decision making

This is concerned with making a choice between alternatives and frequently an important factor in making that choice and the financial implications of the various alternatives.

Cosmetics

Any substance that is intended to make the body look beautiful.

ROLE AND EFFECTS OF COST AND MANAGEMENT ACCOUNTING IN MANUFACTURING INDUSTRY A CASE STUDY OF UNILEVER PLC ABA, ABIA STATE

TO GET THE FULL PROJECT TOPIC AND MATERIAL DELIVERED TO YOUR INBOX OR DOWNLOAD INSTANTLY, PAY N5000 Via: BANK
BANKACCOUNT NAME
ACCOUNT NUMBER
DIAMOND BANK
FREEMANBIZ COMMUNICATION
007 031 2905
FIDELITY BANK
FREEMANBIZ COMMUNICATION
560 028 4107
GTBFREEMANBIZ COMMUNICATION013 772 5121
ZENITH BANK
FREEMANBIZ COMMUNICATION
101 326 3297
OR Pay Online with ATMAfter Payment, you can use the chat app at the right-hand side of your browser to download the material immediately or Text Name, Title of the project paid for, your email address to 08060755653.Do you prefer paying with Bitcoin, Ethereum, Bitcoin Cash or LiteCoin?

Hits: 44

Was the material helpful? Comment below. Need the material? Call 08060755653.

This site uses Akismet to reduce spam. Learn how your comment data is processed.