Standard Cost Analysis As An Aid To Management Decision Making (A Case Study Of Coca-Cola Bottling Company Of Nigeria Plc Ilorin)
The main objective of writing this project is to evaluate on the standard cost analysis as an aids to management decision making and the researcher is using a case study of coca-cola Bottling Company of Nigeria plc Ilorin.
The evaluation on the standard costing analysis as an aids to management Decision making can not be over look in an organization.
The first chapter consist of introduction, Aims and objective of the study, statement of the research problems, justification of the study, scope of the study, limitation of the study, Definition of Related terms, plan of the study.
The second chapter: of the work concentrated on the literature review, management pyramid, element of standard costing, standard costing sheet, variance analysis, importance of standard costing to management decision, limitation of standard costing, costing techniques, costing centre and unit, method of costing significance of costing to management personnel.
The third chapter: deals with the research methodology, source of data, sample method, sample size, questionnaire design.
The fourth chapter: it will contain the Analysis, researcher findings.
The last chapter: it deals with the summary, conclusion, Recommendations and References and Questionnaire.
1.1 Background of the Study
The bottling industry is presently undergoing a revolution worldwide due to the twin impacts of deregulation and technological break through most company in Nigeria are quite relatively operating on differentiated cartel because of the trend and competitive environment. Under such conditions costing and management decision process strategy suddenly become more vital tools to booster services, it should be noted that such concepts of “Standard costing” and” management” all about? Standard costing is a technique which uses standard for costs and revenues for the purpose of control through variances analysis.
Management is an act that coordinates all group effort. It does not only concerned with profit oriented enterprise but an act of every human Endeavour’s be it product or service wise.
Managing is essential in all company as well as in all levels of organization in attainment of the group goals.
The coca-cola Bottling Company of Nigeria Plc can be traced briefly with that of united state of American which came in to being in Nigeria in the year 1953. When Nigeria bottling company set up it first plan in Lagos Precisely at Oyingbo but later move to Apapa, it has an additional development to the existing companies in the area, a contributed immersively to the socio- economic group of the country.
John Pembetion was the investor of coca-cola in May 1883 being a book keeper, he designs the following script that distinguishes the advertising and marketing activities, Robinson also had excellent pen man ship. It was he who first script “coca-cola in the following letters which has come the famous logo today. The soft drink was first sold to the public of the soda fountain in Jacobs pharmacy in Atlanta.
In 1887 another pharmacist, a business man bought the formula for coca-cola from the investor and was one of the America. Most popular fountain drinks how at the helm the coca-cola company increased syrup sales by 4000% between 1890 and 1900. In April 23, 1985 the trade secret “new coke” formular was released, today products of coca-cola company are consumed at the rate of more than one billion drinks per day.
The success of coca-cola bottling company of Nigeria place gave birth to opening of some branches like port-harcourt, kano, Ibadan, Enugu, benin and Ilorin which is used as the case study. This success also brought the development of some sister industries like delta Glass company which supplies million of bottles required to keep a large bottle company in operation. Als it help in the receding of broken bottles in ijebu ode and kano state which manufactures as the berum plastic company that makes the plastic creates for carrying bottles.
The coca-cola Nigeria bottling company produce drinks such as coke, crest, bitter lemon, Schweppes fanta. Soda water and eva table water. The Nigeria coca-cola bottling company of Ilorin unity plant is sited along coca-cola at unity bus stop Ilorin kwara state. The commission of that plant was in 1944 while production actually stated in 1995.
1.2 Statement of the Research Problem.
The statements of the research problems facing standard costing as a tool for effective management decision making include the following;
- What do you understand by the word statement costing?
- Do you know the type and element of standard?
- What relationship do standard costing and budgeting have?
- Is there anything you know about management decision making?
- What are the limitations of standard costing?
- Is there anything called variance in standard costing?
1.3 Objectives of the Study
The success of business ventures depend largely on a well defined and clearly stated management decision making because a sense of directions and focus as well spelt out.
The aim and objectives of this study are:
- To highlight the concept of standard costing.
- To enumerate the type and element of standard cost
- To show the extend of standard costing in budgeting
- To know the relationship between standard costing and variance analysis as a tool for management of standard costing.
1.4 Justification of the Study.
The research work is undertaken in an attempt to identify the major contribution of standard costing as an aid to management decision making. The findings and suggestions of the write up will attempt to find a lasting solution to problems facing industries and those who are already engaged in business. It will hopefully go a long way in enabling industries to improve in their effort toward making Nigeria an industrialized area and development economics management of the country.
1.5 Scope of the Study
Most people don’t know the benefit accruing from the activities of companies which may be due to ignorance as to what services are afford by management. It does appeal to us to carry the coronaries through reasonable recommendations that will improve on the performance of companies. Therefore the purpose of this research work shall restrict the study to the concept of standard costing . Importance and limitation of managerial decision
1.6 Limitation of the Study.
There are always two sides of a coin: the head and the tail. Therefore there is no undertaking without a set back. In the case if this research work, the researcher encountered some problems, the critical problem encountered which may infringe the successful conduct of this research work of his magnitude demand much time and effort on the part of the subject matter of the study in order to come up with a viable and acceptable exposition.
Another problem has to do with the non-challant attitude of the people towards the questionnaire distributed. The attitude in their port could be helping matters despite the promise by the researcher that the information provides will surely be used for academics purpose and not for other things, this much information provided could be obtained.
1.7 Definition of Related Terms
It ensures that the readers understand the different terms in the work.
- Company: a legal entity.
- Capital: money used to start business.
- Production process of utilization into goods and services.
- Prospects: wealth.
- Cost: Estimated amount
- Standard: measure management : set of body that piay for the company.
1.8 Plan of the Study.
The study is divided into five chapters.
- Chapter one which consist of the introduction, background of the study, statement of the researcher problem aim and objectives of the study, Justification of the study, scope of the study, limitation, definition or related terms and plans of the study.
- Chapter two contain literature review, management pyramid elements standard and costing sheet, variances analysis, importance and limitation of standard costing, costing techniques cost centre and unit, method of costing and significance of costing to managerial personnel
- Chapter three, discount the research methodology, source of data, sample method, size and questionnaire design.
- Chapter four expatiated more on data presentation analysis and findings of research
- While chapter five talks about the summary, conclusion and recommendations.
Summary Conclusion and Recommendation
In The introductory part of this project, its main motive centred on the need to bring to the time light the use of standard costing in management decision of an organization.
From this observation made it was discovered that standard costing has a strong part an organization, most especially, consumer oriented organization. Standard costing analysis used by management have tried a lot to bring close relationship between staff, conzumer and the organization.
As a matter of fact researcher had introduce the reader to the topic researched and reviewed, it was discovered through the data analyzed that standard costing has positive effect on sale volume, growth and surviual of a organization.
Lastly, it was also discouered that standard costing analysis used in management decision increase productivity and good image of the organization.
In conclusion, what the research has gather so far, the work has proud beyond reasonable doubt that standard costing analysis used in one of the vital tools that can be utilize by management as major strategy in sales expansion decision.
Also that the effectiveness of standard costing analysis depend on the way it been critically evaluated and the resented by management knowing the important and the competitiveness of the business environment, an organization who wish to surge ahead into the future must create good plan in term of standard costing and order costing techniques for their product and service to be able to maximum strength opportunities and to manage their weekends and threats. And the organization must find a common ground in which consumer interest will be incorporated in the packaging and presentation of their decision to be more appealing to the consumers.
Furthermore, standard costing analysis should be seen as a useful for creating decision. The management should take at as serious as producing the goods and services as in order to achieve profitability, survival and growth objective of the organization.
Standard costing analysis has been used to aid management decision-making and mange organization all over the world through efficient standard costing techniques evaluation have been able to have effective and efficient production operation and activities of the organization. It should be taken to consideration that changing condition of the market place, economic security and influence, can only occur through appropriate and efficient way of management decision.
It is therefore, recommendation that for any organization to survive in this hard economy period and fr it to maximize profit, there is need for such organization to critically evaluate standard costing analysis to be able to achieve a large market share as compared to that of its counterparts.
The organization management should plan the standard costing analysis used in such way that the consumer will not see the costing as a way of exploiting them. Other recommendation are thereby highlighted below.:-
- It must be timely
- It must be clear and purposeful
- The appropriate variance must be considered in carrying and the standard costing techniques.
- The management using standard costing must consider different department and unit to take care of different consumer in different geo-political zone.
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