Production Cost Control In Manufacturing Organisation

Project and Seminar Topics with material for Banking and Finance

Production Cost Control In Manufacturing Organisation


This research work is based on the production cost control in manufacturing organization.

The study was motivated on how to control cost in manufacturing industries in order to achieve the purpose of which the industry is establish.

To solve the research problem the researchers made use of only secondary source of data, since the guidelines for writing the ND research work in banking and finance was restricted to secondary source of data.

The research instrument used to collecting the data were textbook, journal, magazine, newspaper. Etc.

Also, based on data collection form secondary soruce, it is quite obvious that I have found out that for production cost control to fully and well carried out, there should be combination of man and material resources in efficient manner. Also, that the need for cost control is very important in the sense that it increase profitability of manufacturing firm.

Finally, I discover that may organization neglect the issue of internal control system in cost control and thereby call attention for immediate implementation of this in our manufacturing industry.

Chapter One

1.0 Introduction

1.1 Background of Study

The main aim of this research work is an attempt to verify the indiscriminate increase in the prices of commodities produced in this part of the country by manufacturing organization and companies. This continuous rise in prices has attracted the attention of many citizens, mostly those who have ignorant of the adverse effect of this continuous rise in the prices on the citizen and the country economy.

This research paper will therefore aim at giving a comprehensive account of the control of cost in the production field with emphasis on the manufacturing organization. The attribute of every organization is the pursuit of a goal and this goal exists in different forms. It is evident, therefore that every manufacturing organization be it sloe, partnership, corporation, among others have an objective and this primary objective is profit maximization other objective such as social is purely secondary and solely depend on the profit.

Profit is the surplus or excess of to all income over total cost during a specific period of time. It therefore follows that before any organization can make profit, they must exercise control over their production and services.

There are other one still under production and the best ingredients are used for production in PRODA. Administration and Staffing. Although the government Board has responsibility for general management as set out in the natural science and Technology, Act 1980, the day to day running of the institute is the function of the direct or research.

Administration, the institute is organized into divisions science, Engineering, ceramics and administration.

The activate division form the point of view of research and development functions are science, Engineering and ceramics.

In order, both their research and development work and their production work be given equally emphasis each of these activities division is in turn organized into research units.

1.2 Statement of the Problem

Many organizations operating in our country today try every effort to make use of they break even in order to make profit, still al these efforts seems t be worthless. They reduce their cost in order to maximize as suppose to be, why do so many organization still not breakeven, not to talk of making profit after all their efforts to control cost?

Does it mean that their cost control is not effective? The researcher will give answer to these questions in his subsequent chapters.

1.3 Purpose / Objective of the Study

Some of the objectives of this research work is

  1. To assess the various production cost control techniques and effectiveness as well s the efficiency.
  2. To know some of importance and need for cost control.
  3. To know cost control and reduction Technique in manufacturing originations.
  4. To know the use of budgetary control system manufacturing organization.
  5. To know the use of budgetary control system in cost control

1.4 Significance of the Study

This research work as carried out by the research on production cost control in manufacturing organization will be of great important to so many manufacturing firms in the area of cost control in order to maximize profit. Also individuals who are interested in entering into the business manufacturing will equal benefit from this project.

1.5 Limitation of the Study

The following limitations were faced by the researcher and limit efforts in elaborating the researcher work.


The researcher is a student with no souce of income and has been discouraged from traveling to all the labour market in Nigeria to collect dta for this study. She ahs therefore chosen Enugu metropolis because of proximity and ease of contract to the workers.


This project work has just one semester time limit. It would have been desirable for a longer time to complete the topic and extend the coverage but it was not possible.

Pressure from Academic Work:

The student was jam-packed with other academic activities and at the same time writing this research work and this brought little difficult in finishing this research work on time.

Chapter Five

Conclusion and Recommendation

5.1 Conclusion

In conclusion, it is important to know the fact that cost control in any organization is a necessity for any organization is a necessity for any organization that wishes to survive ad even grow. Much as we agree that fro a organization to be profitable, it must seek to obtain as much revenue as possible. This however, is just one side of the cost, cost being the other side. Constant control effectiveness means therefore, profit control.

A well organized organist or institute should have an effective costing system so that proper costing be easily affected, so as to determine the actual cost of products based on the analysis carried out.

Accumulating of cost data is not an end itself rather, itโ€™s analysis and presentation as basis for control and other vital decisions should be emphasized the need for cost control is an outstanding institute like PRODA has become more imperative having in mind the increasing number of customers both within and outside the state or even outside the country. Even though, there are not many of them outside the country. Since the market for its products is made up of both local and foreign market, the basis for effective competition is now shifting into the ability to carried out competitors by way of lower cost.

5.2 Recommendation

Based on the analysis of the data collected form the institute the following recommendation will be necessary.
For effective control, the institute should practice job order costing in its true meaning that means that cost should be ascertained, analysed and controlled among other characteristics per unit or with this adequate cost control can be affected and this will go long way in reducing the production cost of the institute and clear identification of cost per unit or output be made.

Moreover, itโ€™s very vital to apply the economic order quantities (EOQ) model and its associated re-order quantity parameter should be emphasized. This will help the institute to know the actual time to place on order, the quantity order for and the number of order is place in a year by using the previous year performance result as the base. This will help to reduce the high carriage inward cost incurred form excessive raw materials stock packing.

It is equally important to examine the feasibility of utilizing other locally available raw material in the production and still maintains the original or higher quality of the products. This is necessary because it will help to offset most of these unfavourable variances that occur as regards the unavailability of raw materials.

Moreover, a more effective supervision and inspecting of the production facilities should be carried out as a regular basis in order to reduce or control the various wastages in arrears of leakages of materials. This will help in prompt discovery of such fault and subsequent necessary action to rectify them. Also the supervisors should be instructed to be close to the workers will be rewarded by giving them special prizes. This will serve as motivating to the various work groups, thereby increasing their productivity with the necessant of reduction of overhead cost, the security arrangement towards the use of clock cards is unsatisfactory. It is pricise for friends or colleagues to clock in employees that are not around. These can be further complemented by the use of registers within the production unit, so that during the production process, the attendance of employees output achieving targeted level of production and consequently reduce fixed cost per unit of output and also ensuring that remunerating paid to employees are strictly for work done, hence controlling the cost of labour.

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