Impact Of Effective Cost – Control In The Profitability Of A Business Organization (A Case Study Of Nigeria Bottling Company Limited)

Project and Seminar Material for Accountancy / Accounting

Impact Of Effective Cost – Control In The Profitability Of A Business Organization (A Case Study Of Nigeria Bottling Company Limited)


Table of Contents


  • Certification
  • Dedication
  • Acknowledgement
  • Table of Content

Chapter One

Background of the Study

  • 1.1 Introduction
  • 1.2 Statement of the Problem
  • 1.3 Historical Background of the Study
  • 1.4 Research Questions
  • 1.5 Objectives of the Study
  • 1.6 Research Hypothesis
  • 1.7 Significance of the Study
  • 1.8 Scope of the Study
  • 1.9 Definition of Terms
  • 1.10 Plan of the Study

Chapter Two

Literature Review

  • 2.1 Meaning of Cost Control
  • 2.2 Cost Control Techniques
  • 2.2.1 Cost Planning
  • 2.2.2 Cost Reduction
  • 2.2.3 Budget and Budgetary Control
  • 2.3 Effect of Cost Control
  • 2.3.1 Direct Cost Control
  • 2.3.2 Overhead Cost Control
  • 2.4 Conclusion

Chapter Three

Research Methodology

  • 3.1 Sources of Data
  • 3.2 Population of the Study
  • 3.3 Sampling Method
  • 3.4 Method of Data Convention

Chapter Four

Data Presentation and Analysis

  • 4.1 Data presentation
  • 4.2 Data Analysis According to Test of Hypothesis
  • 4.3 Interpretation

Chapter Five

Summary of Findings, Conclusion of Recommendation

  • 5.1 Summary of findings
  • 5.2 Conclusion
  • 5.3 Recommendations
  • References

Chapter One


Background of the Study

1.1 Introduction

This industry developed in Nigeria and West Africa starts as a result of necessities by the colonial masters to process agricultural products obtained in their various territory.

Most of the industries were agro-based and inter minerals resource. Other industries later spring up as a result of one or the other, with the introduction or the co-operation from the organization are directed towards minimizing cost to attain maximum profit.

Therefore, control is not possible without planning and planning without a complementary control system is pointless.

Cost control is concerned with watching the performance of an organization and the control process include the steps of establishing standards and taking measures that such standards are formed with.

Cost control is very essential for improving the efficiency with which to conduct an organization to maximize profit such resultant improvement can be at immense benefit to the consumers who enjoy lower price, shareholders who earn higher returns, employee receive higher wages and government collect more taxes.


1.2 Statement of the Problem

Statement and recruitment is a step on management development, which help fundamentally to find and attract potential employees who it successful, eventually full vacant positions.

In management, professionalism developed states of selection and recruitments which employees in conjunction with other tools of personnel and maintenance of efficient work force and indeed the utilization and the conservation human resources.

Infact a firm working like abundant evidence clearly prove that these tests, all things being equal are creditable predictions of employees job performance.

However, the Nigeria societal immortality and political influence have created discrepancies in selection procedures through such vies as favoritism and nepotism. These are problems arising from vague description of job by these personnel management, because of these problems, the need for a close up examination of the whole selection process or labour turn-over in Nigeria bottling company plc, become inevitable.


1.3 Historical Background of the Nigeria Bottling Company

The Nigeria bottling company limited, the authority companies making up the group of companies. The A.G leventies group of companies has immensely contributed to the socio economic development of Nigeria. It’s headquarters is at Iddo, lagos states. The history of coca-cola company limited can be traced briefly to the history of coca –cola company of the united states of America (U.S.A) which is very old organization.

Coca-cola as a drink was first brewed and sold at soda fountain in Atlanta Georgia, USA in 1904.

In 1806, coca-cola was first made by Dr. John stylla periberton, a pharmacist and the name coca-cola was given by frank M. Rohmson who was Dr peribetor’s partner and book keeper. He also designed the flowing script that distinguishes the famous trade mark. The drink was made know to people through Dr, Perabeton advertising and marketing activities.

According to history, coca-cola first came to Nigeria 1953 when Nigeria bottling company set up its first plant in lagos, precisely at oyingbo but later move to apapa.

It was to be the beginning of the existing story of growth and development to the company’s establishment.


1.4 Research Questions

In order to get information from respondents, the following question were formulated..

  1. What are the various types of cost-control and the extent of cost-control in a business organization?
  2. In what extent can cost-control improve or enhance business organization?
  3. What are the roles of cost-control in a business organization?
  4. What constitute the cost – control and profitability?
  5. What are the impacts of cost – control in the profitability of a business organization?

1.5 Objectives of the Study

The objectives of the study for this research work are as follows:

  1. To examine the various types of cost-control and also the extent of cost control in a business organization.
  2. To know how cost-control has been an improve to business organization.
  3. To discuss the roles of cost –control in a business organization.
  4. To examine cost –control and profitability
  5. To expatiate the impact of effective cost –control in the profitability of a business organization.

1.6 Research Hypothesis

One of the characteristics of this study is to enumerate some fundamental hypothesis statement revolving round the problem of the study. Therefore, some hypothesis has been formulated to make clarification of the problem in effect of cost-control for this reason, the following question are tested.

  1. Does cost –control have any effect on the profitability of a business organization?.
  2. Does cost-control have any effect on business organization?

The general hypothesis that will be tested in the cause of the research is as follows:

  • HO: Effective in cost –control will not be positive impaction on business organization
  • HI: Effective in cost –control will have positive impaction on business organization

1.7 Significance of the Study

One of the important of the study will be to extend the knowledge on the modes of operation to extend the knowledge on the modes of operation of production companies in Nigeria with emphasis on cost- control in Nigeria bottling company plc. The relationship between its function and mode of operation. This will suggest remedies to problems militating against Nigeria bottling company plc, Ilorin planton cost-control activities.


1.8 Scope of the Study

The scope of this research work will be focused on cost-control and cost reduction of the Nigeria bottling company plc, Ilorin plant in the area of production process to maximize the profit of the company from the year 1990 till date

The limitation of this research work may be limited by sufficient finance, lack of enough time and un-cooperative attitude of staff.


1.9 Definition of Key Terms

1. Cost:

This is the price paid or amount of money needed for something.

2. Control:

This means management restriction and regulation of something to achieve a standard set up.

3. Budget:

A financial or quantitative statement prepared and approved. Prior to a defined period of time as regards the policy to be pursued during that period, could be income or expenditure.

4. Cost Control:

This refers to the guidance and regulation of operating cost by management action. It is also refers to as limitation or contiments of cost.

5. Budget Control:

This is the establishment of budget relating the responsibility or the executive to the requirement of the budget or policy and the periodic review or comparison of the actual result with the budget performance, their to secure an approval for individual action or as to remedial course of action

6. Cost Accounting:

These used accounting procedures to classify and record expenditure so as to allow accumulation of cost information in order to be able to measure managerial efficiency.


1.10 Plan of the Study

As mentioned earlier, the study will focus on the effect of cost control in the profitability of a business organization.

  • Chapter one of the study contains introduction, statement of the problem, research questions, objectives of the study, research hypothesis, significance of the study, scope of the study and definition of key terms
  • Chapter two of the study deals with a literature review of the study where the theoretical aspects such as the historical elevation of cost control meaning, cost –control techniques, cost planning, cost production, budget and budgetary control, the effects of the cost control in a business organization direct control and over tread cost control.
  • Chapter three of this research work deals with the exposition of historical background of the study and methodology which deals with the methods and sources of data collection and analysis.
  • Chapter four of the study consists of the data presentation and data analysis
  • Chapter five contains the summary of the findings and the case study, recommendations and conclusion of the researcher on the topic. The list of contracted materials and text book with their various author are also stated, therein like the bibliography reference.

Chapter Five


Summary of Findings, Conclusion and Recommendations

5.1 Summary of Findings

From the interview conducted with the various officers is specified department, the following findings were obtained.

That the Nigeria bottling company ilorin plant has a cost control measures in place to ensure the success of the company.

Budget is one major measure by which the company controls its cost.

This is done by ensuring compliance with the budget and adequate monitory of the budget. No credit sales are another measure which the company adopts and this has helped in avoiding running bankrupt.

The Nigeria Bottling company also has effective internal controls such as internal audit which help to check fraud. Also, the fact that the company recruits competent hands who are Nigerians, removed the high cost of paying expertise.

Furthermore, most of the materials used, especially for packaging, are procured in bulk and direct from manufacturers. This help to reduce the cost obtaining their materials.

The study also revealed that with promotion and advertisement proper development of marketing team, controlling selling expenses and delivery of products adopted by the company which helps to control costs.


5.2 Conclusion

Based on the findings of the study, summarized above the following conclusion has been drawn.

  1. The Nigerian Bottling company has effective cost control measure
  2. There is effective distribution of products to customers
  3. Non- acceptance of credit has greatly helped the company to maintain financial base
  4. Each department of the company is involved in cost activities at various levels.
  5. Budget and adequate planning is the major investment that makes for effective cost control.
  6. The Nigeria Bottling company relies on indigenous staff rather than expertise.

5.3 Recommendation

Based on the findings, conclusion reacted in the study, the following recommendations are made: that the company should expand its research base to improve on the level of cost control.

  1. An analysis of course of wastage into its various components should always be done monthly cause due to machines, materials or man or a combination of this shall always be undertaken. This will no doubt create more control channel focus.
  2. Explanation for abnormal wastage on the floor by manufacturing sectional managers through plausible should a form for round table discussion between a management account and manufacturing line managers and such problem will be highlight and such will need to be made known to the management representation.
  3. The company should limit more stock especially imported one to avert imminent stocks out and consequential production stoppage.

Impact Of Effective Cost – Control In The Profitability Of A Business Organization (A Case Study Of Nigeria Bottling Company Limited)


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