ABSTRACT
The purpose of this topic or study inventory valuation as aid to
manufacturing industry with reference to Tea Time bread industry Enugu. This is
to highlight on the importance that our industries can perform effectively and
efficiently as it concern’s inventory or stock valuation.
To quite this study four research question were formulated a
review of literature was done to ensure solid and more elaboration for the
study. A structural questionnaire was densely and administered, the research
distribute to questionnaire to the employees of tea- Time Bread industry while
35inene natural collected.
Based on the above some of the above some of the major finding
include presentation of data and them analysis. The analyses were done on two
categories the general questionnaires sent and structural personnel inter
views. And finally, chapter fine discussed all the finding of the result made
by the researcher and recommendation as well as conclusion.
However, the research will as a matter of fact add the importance
of inventory valuation in an industry of Tea-time Bread.
TABLE
OF CONTENTS
CHAPTER ONE
INTRODUCTION
1.0 Background to the Study
1.2 Statement of Problem
1.3 Objective/ Purpose of Study
1.4 Significance of the Study
1.5 Research Question
1.6 Definition of Terms
1.7 Scope of Study
CHAPTER TWO
Literature reveal method of valuation
Summary of related literature
CHAPTER THREE
3.0 Research methodology
3.1 Design of the study
3.2 Area of study
3.3 Population of the study
3.4 Sample and sampling
procedure
3.5 Instrument for date
collection
3.6 Validation of the research
instrument
3.7 Reliability of the
research instrument
3.8 Method of data analysis
CHAPTER FOUR
Presentation and Analysis of Data or Results
CHAPTER FIVE
5.0 Discussion of the Result
5.2 Conclusion
5.3 Implication of the
Research
5.4 Recommendations
5.5 Suggestion for Further
Research
5.6 Limitation of the Study
Reference
Appendix
CHAPTER ONE
INTRODUCTION
BACKGROUND TO STUDY
Numerous routine planning and control activities formerly
performed by clerks have developed into sophisticated functions with far
reaching effects on corporate objectives and profits. Inventory valuation, as a
vital element is one of such functions.
Inventory otherwise returned to as stock can be defined as
items of value held for use or sale by an enterprise and usually comprise of
raw material supplied used for production work in progress and finished
goods at the end of an accounting period. Valuation on the other hand may be
defined as “an element of management and estimation of financial values such
like values of property, land, stock etc.
Therefore, inventory valuation is simply the means by which
merchandise materials goods in process, finished goods supplies
On hand are values by accounting method of valuation, it is the
means by which the store ledger accounts of goods is debited with the value or
amount of goods received or acquired and credited with the value of the goods
disposal off or sole during the accounting period where as by physical method
of valuation, it is the means by which the pans set for buying, storing,
handling, issuing, supplies and stock ledger is made more effective by constant
physical measures.
It will be more relevant to note that the value of inventory may
be substantial, surpassing or only second to that of property plant and
equipment depending valuation involves the calculation of items to be held, in
stock, decision on the extend of stock, holding of the items individually and
collectively, the regulation of the impact of items in the store house and
their issues. By the above mentioned processes, it will be possible to adjust
continuously the quantity and value held to conform to circumstances at all
times.
The manufacturing companies therefore have a lot of factors which
comprise the cost of storage as interest on value of store in stock
determination of stock obsolescence, recording and accounting etc. it may be
very clear that only an efficient application of standard management or
management by objective will help to avoid the discrepancies encountered by
many companies valuing their inventories. For cost accounting system to be
fully of material from the time order is placed with supplies until the
material is used to production.
The importance altitude to valuation of inventory is emphasized in
paragraph 11 of schedule 2 of the company act of 1968. It states’ if the amount
carried forward for stock in trade or WNK work- in progress is material for the
appreciation by its members of the companies state of affairs or its profit and
loss form the financial year the manner in which the amount has been computed
must be stated.
However, it is clear that no single method of inventory valuation
is suitable to all business firms unless the method adopted is suitable and
appropriated to the circumstance of a particular business firm and used
consistently institute of chartered accountants contains guidelines on stock
valuation and the following are extracts therefrom.
The elements making up cost of stock are direct expenditure on the
purchase of goods bought for resale and of material and components used in the
manufacturing of goods finished.
Other direct expenditure which can be identified specifically as
having been to acquire the stock or bring it to its present location examples
are direct labour, transportation processing and packaging, such cost if any of
the overhead expenditure is properly carried forward in the circumstance of
business instead of being charged against the revenue of the period in which it
was incurred. Overhead expertise’s may be divided into production
administration selling and finance expressed and other charges, which relate to
bring the stock to its existing location and condition.
The fragment movement of physical item into and out of inventory
is the charges in unit costs complicating the accounting for inventories and
cost of goods sold.
The questions now is, what costs should be include in computing
the naira 9monetary) value of inventories. There does not seen to be a clear
cut line of distinction between in enterable necessary for obtaining the
inventory and placing it into storage which is reasonably charged into
inventory.
Thus the cost arising from inefficiency or prolonged storage of
item in inventory and periodic charges. To include these costs in assets,
balance could easily result in the cost being greater them any reasonable
measure of value. Form a practical point of view, it is not unreasonable for a
merchandising firm to place into the inventory account only the net invoice
price, freight and the handling costs of placing the merchandise in its storage
other cost would be normally considered as expresses of the period.
Inventory records are only a means to an end of inventory
Valuation Company has thousands of impressive store card whose balance are
always in precise agreement with physical courts taker in its immediate store
room. But desperate enrolls paper shuffling efficient employees. Inventory
valuation may still be inadequate. Hence the management duty is not clerical
accuracy but proper valuation and control.
The Tea-time bread industry limited Enugu has its major objectives
like other ente4rprise profit maximization. This company was established to
employ members of the public both directly and indirectly. By indirect
employment the research means the staff of the company whereas by indirect the
research means distributor and other dependents on the service of the company
STAEMENT OF PROBLEM
(1) Inventory valuation is
not efficiently and effectively practiced in the firm.
There is no adequate orientation to inventory valuation.
There is no consisted use of one system of inventory valuation.
Stock taking is done at will instead of periodically, quarterly or
yearly.
When stock taking occurs there is no measure for error control.
1.3
OBJECTIVES/ PURPOSE OF STUDY
To determine the extent to which Tea-Time bread industry has
incorporated inventory valuation.
To find out the extent the valuation method has helped in a ring
at good management decision.
To what way does Tea-Time Bread industry helped to reduce the
unemployment problem within our nation, Nigeria.
To determine whether or not practice of the valuation system is of
benefit to the organization
To determine whether or not practice of the valuation system is of
benefit to the organization.
1.4
SIGNIFICANCE OF THE STUDY
The business environment is becoming very dynamic and competition
for business organization survive in a rapidly changing environment
management must keep abreast of the proper direction in order to arrive at this
management requires adequate and timely ideas or information that would enable
plan for the attainment of pre – determined objectives. This study will be of
value of management, employees and owners of business organizations because of
its reevaluation on.
The need to consider immentory valuation of part of the role in
order to build up the organization.
How to improve the valuation method by ensuring that the company
practices the valuation method efficiency and consistency.
Having this at the back of my mind, this study therefore will
bring to the knowledge of our management (Tea – Time bread industry) Enugu the
numerous solutions to their problems being encountered by stock or inventory
management. The study will also help to produce reliable costing information as
regards to the records of materials issued.
If production and delivery of goods were instance Laneous, there
would be no need for inventory of stock expect as a hedge against price
changes. Therefore inventory must be maintained so that customers may be
serviced immediately or at least guidely enough so that the customer does not
turn to other sources of supply.
Finally, production operation cannot flow smoothly without having
inventories of direct materials work – in- progress, finished goods and
supplies.
1.5
RESEARCH QUESTIONS
To what extent has the tea – time bread industry incorporated
inventory valuation in their production?
To what extent has valuation method contributed in taking good
management decision?
What are the benefits of inventory valuation to a bread
manufacturing industry like tea time bread?
To what extent has the tea – time bread industry helped to reduce
the unemployment problem in Nigeria?
DIRECT MATERIALS: The
raw materials that become an integral part of the finished product and are
significant enough to warrant tracing them from raw material to finished goods.
1.6
SCOPE TO STUDY
This research work concerned the inventory valuation as an aid to manufacturing
company reference to tea-time bread industry limited. However, as a result to
the finance and time constraint the research from her proper investigation,
find it difficult.
Actually, the research only studied the tea – time bread industry limited which
formed her research unit. Furthermore, the researcher concentrated on the study
mainly on production department and the administration department question
which will be of help for a meaningful research work. Below are some of the
designed questions.
Does the system of inventory valuation in your organization
receive adequate attention as to permit effective efficient practice?
Do you opinion that there is adequate orientation to inventory
valuation
Is there any designed period of inventory valuation in your
organization?
At the time of inventory valuation in practice in your
organization (if not all) is there any measure designed for error control.
DEFINITION OF TERMS
RAW MATERIAL: This is the material or component used in price or
sum of the applicable expenditure and charges directly incurred in bringing
articles to us existing location.
FINISHED GOODS:
these units of goods that are completed and awaited for sales.
WORK – IN – PROGRESS:
This is partly finished goods that can be conveniently classified in this
category.
ORDER: To
request for something to bring made in return for payment.
GOOD RECEIVED NOTE: This
shows the date the supplies name, purchase order, quality and description of
the goods, their condition on arrival and details of returnable packing
materials and its signed by the checker.
CREDIT: A
book – keeping entry recording entry the reduction or limitation of an asset or
an expense.
DEBIT: A
book – keeping entry recording the income of or addition to an asset or an
expense.
BIN – CARD: This
is the card used by store keeper to record the movement of the stock. It shows
the description code number, maximum number, minimum number, re – order level
and quality and balance of stock in hand.
VENDOR: A
vendor is a supplier or seller of goods to the company.
MANAGEMENT: Is
the controller and organization of business.
NET REALIABLE VALUE:
This is the estimate or proceeds from sales less all additional costs incurred
to the point of completion marketing, selling and distribution of an item of
stock.
REPLACEMENT VALUE: This
is the case of stock raw materials and purchased part and what it would cost to
purchase similar qualities at the market price ruling on the date of the
balance sheet.
MOVE TIME: The
time taken in transporting the goods to the rent processing location.
UCUE TIME: The
amount the time job spends awaiting to be worked on.
LEAD TIME: The time required after placing or order or adopting a
plan of operation or production before materials and facilities can be acquired
and made ready and actual production initiated.
SET UP TIME: Preparing to run a job in a machine.
MARGIN OF SAFETY: The excess of sale over the break – even sales
volume expressed as naira or in quality (unit or as a ratio).
PERIODIC INEVNTORT SYSTEM: A
system of accounting for merchandise in which inventory at the balance sheet
date is determined by counting and pricing the goods on hand.
PERPETUAL INVENTORY SYSTEM: A
system for merchandise that provides continuous records showing the quality and
cost of all goods on hand.
INVENTORIABLE: Assets
that cannot be immediately assigned to inventory.
Department | Business Administration and Management |
Project ID Code | BAM0121 |
Chapters | 5 Chapters |
No of Pages | 89 pages |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |