CHAPTER ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
Cost control is a vital element in the management aspect of functional
activities that covers all aspects of an enterprise.
It was first performed in a routine manner by clerks, but with the advent of
professional management skills, it has evolved in to a more sophisticated
function with a far reaching effect on a company’s profit.
This study will critically examine the constituents of cost management, such as
production cost and control, purchasing cost and control, marketing cost and
control, and other non-manufacturing cost and control.
Various cost control techniques will also be highlighted to provide the
management of Nigerian Bag Manufacturing Company a pool of casting techniques
that will assist them in maximizing profit.
1.2
STATEMENT OF PROBLEM
This research work is of immense importance to
all organization. It tends to focus attention on the following areas;
1. In adequate allocation of the company’s’ budget
in expressing company’s policy on programme.
2. In adequate / inaccurate yardstick for checking
whether the services of agent distributors or middle men will be more
economical than direct sales.
3. The company’s budget did not set accurate
standard which performance can be measured against.
4. How to gain maximum utility from the staffs as a
way of improving productivity and maximize profit.
1.3
OBJECTIVE OF THE STUDY
This research study is directed towards enabling
management of Nigeria Bag Manufacturing Company to know the importance of cost
control and its effect on profit maximization. It provides the management with
the following;
1. To identify the role of costing as an instrument
for expressing company’s policy or programme.
2. To find out when agents, Distributors and other
middle men will be more economical than direct sales.
3. To determine a more cost reduction strategy’s in
a company’s operation.
1.4
THE SCOPE OF THE STUDY
The scope of the study is mainly focuses on the
cost control with the view of keeping expenditure within acceptable
limits.
1.5
RESEARCH QUESTIONS
1. How has cost been controlled in the company?
2. How competent are the staffs responding to the
control of various cost?
3. Is the accounting department in charge of cost
control?
4. The minimization of fixed over head cost, is it
a function of profit maximization?
5. Can minimization of purchases be a function of
profit maximization?
6. Does labour cost control begins at the
recruitment stage?
7. How efficient and effective has the stock level
been maintained?
1.6
RESEARCH HYPOTHESIS
1. Ho: Other
labour costs are not associated with gross wages.
HI: Other labour
costs are associated with gross wages.
2. Ho:
Shareholders do not have adequate information to judge the cost effectiveness
of managers.
HI: Shareholders
have adequate information to judge
the cost effectiveness
of managers.
3. Ho: Effective
cost control has no effect on profit maximization.
HI: Effective
cost control has effect on profits
maximization.
1.7
SIGNIFICANCE OF THE STUDY
This research work is instituted to show the
management of BAGCO those areas of the company’s programme that need cost
reduction while still producing the company’s product efficiently and how it
will enhance the level of profit.
1. Cost control techniques will provide the
management with economic ways of producing and marketing products.
2. The organization will know how to accomplish a
programme at a reduced cost.
3. Managers at all level will know how to plan in
terms of purchases, production, and marketing to embark on, in other to
minimize cost.
4. The shareholders will be furnish with better information
which they can assess the management effectiveness on each of the company’s
product.
1.8
DEFINITION OF TERMS
Agents: These are people who act for another person (Principal) in a
business.
Budget: This refers to a statement that shows the inflow and outflow
of money within a given period of time.
Business: This is an economic activity undertaken to produce goods and
or services for the satisfaction of mankind at a reward.
Cost: This refers to expenditure incurred over a period of time to
produce a product or a service.
Distributor: These are persons or agencies responsible for the commercial
dispersals of goods.
Effectiveness: This simply means the ability to meeting a specified goal or
objectives.
Efficiency: This means meeting up a specified goals or objectives at a
reduced cost.
Management: This is all human activities aimed at planning, organizing,
directing.
Department | Business Administration and Management |
Project ID Code | BAM0218 |
Chapters | 5 Chapters |
No of Pages | 96 pages |
Methodology | Chi Square |
Reference | YES |
Format | Microsoft Word |
Price | ₦4000, $15 |
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Contact Us On | +2347043069458 |