Full Project-THE ROLE OF COST ACCOUNTING TECHNIQUES IN ACHIEVING EFFECTIVE COST CONTROL IN THE MANUFACTURING INDUSTRY (A CASE STUDY OF COCA-COLA NIGERIA PLC)

Click here to Get this Complete Project Chapter 1-5

CHAPTER ONE
INTRODUCTION
1.1  BACKGROUND OF THE STUDY
Costing techniques is the process of ascertaining cost. These techniques consist of principles and rules which govern the procedure of ascertaining cost of products or services. The techniques to be followed for analysis of expenses and the processes of different products vary from industry to industry. The main object of costing is the analysis of financial records so as to subdivide expenditure and to allocate it carefully to selected cost centers and hence build up a total cost for the products. (The Institute of Company Secretaries of India, (2013). In the ancient days, the information required by those who were interested in a business organization was met by practicing a system of accounting known as financial accounting system. Financial accounting is mainly concerned with preparation of two important statements, viz., income statement (or profit & loss account) and positional statement (or Balance Sheet). This information served the needs of all those who are not directly associated with management of business. Thus financial accounts are concerned with external reporting as it provides information to external authorities. But the management of every business organization is interested to know much more than the usual information supplied to outsiders. In order to carry out its functions of planning, decision-making and control, it requires additional cost data. The financial accounts to some extent fail to provide required cost data to management and hence a new system of accounting which could provide internal report to management was conceived of and this is the genesis of Cost Accounting and its techniques such as Marginal costing, Standard costing, Absorption costing e.t.c. The history of cost accounting techniques can be traced back to the fourteenth century. In the course of its evolution, it passed through following stages.
(1) In the first stage of its development, cost accounting was concerned only with the three prime cost elements, viz., direct material cost, direct labor cost and direct expenses. For recording the transactions relating to materials the important documents used were
(a) stores ledger,
(b) a material requisition note, and
(c) materials received note. To account for labor cost, employee time card and labor cost card were devised by Mr. Metcalfe. Later on a distinction between manufacturing and non-manufacturing cost was made by Mr. Norton. Thus material cost, labor cost and manufacturing cost constituted prime cost.
(2) Secondly, around the turn of the nineteenth century, the importance of nonmanufacturing cost (overheads) was recognized as one of the distinct element of cost. The method of charging non-manufacturing cost to the production cost was devised under this stage.
(3) Thirdly, the techniques of estimation and standards are devised. Instead of using actual cost, standard costs are used and by comparing with the actual cost the differences are noted, analyzed and disposed off accordingly. This helps in knowing the efficiency of the business undertaking
(4) Fourthly, cost accounting techniques were applied to all types of business undertakings. The costing principles and techniques were also extended to important functions of a business.
(5) In modem times the development of electronic data processing has occupied significant stage in the growth of cost accounting system. Having ascertained ‘cost’ and ‘profit’, cost accountancy is concerned with presentation of information to management to enable management to carry out its functions, reports must be promptly made available at the right time. (Sangladji , 2008). From the mid 1980s, the start of new movements in the field of managerial/cost accounting, a gap has emerged between the opinions of academia and practitioners regarding the degree of usefulness of managerial/cost accounting techniques. It is believed that practitioners generally prefer managerial/cost accounting techniques which are simple, practical and economically applicable. On the other hand, many authors and academia believe that the traditional managerial/cost accounting techniques are obsolete and not effective for managerial decision-making purposes and cost control. As stated by one author, most of the traditional management/cost accounting information are usually too late, too aggregated, and too distorted to be relevant for decision-making purposes. Despite the considerable criticisms to the traditional costing techniques and increasing interest in developing new managerial/cost accounting models in recent years, the traditional cost accounting techniques are still widely used by many organization (Sangladji,2008). According to previous researchers, as stated by Nguyen (2011), different costing techniques have different core competitive advantages to organizations. From the oldest to newest method, decision of managers is still affected, As a result, finding the best method to reduce the failure rates and increase the effectiveness of cost allocation and control is a hard question for both managers and accountants. Based on the accounting history, there are many types of costing method such as: traditional or absorption costing method, variable costing method, standard costing, throughput costing method, and ABC costing method. Changes in business environment requires a better method which can help managers control their performance. For many researchers, cost accounting techniques are still a major concern for them. Different techniques lead to different decisions of the managers therefore profits to the organizations can not be the same. A dynamic business environment lead to the need for new costing methods for new cost objects. Marginal costing was born as a result of the demand for this. According to this method, only costs which are adjusted to the production process should he concerned by managers. However, in the long run, some fixed costs still need to change. As a must a new cost accounting method is invented. Instead at sharing equally among various departments and maintaining the fixed costs in the long run, expenses arc divided differently based on some factors such as labor hours, direct materials and the fixed cost can be changed based on the need of the production process. None of the products need the same quantity of direct material as well as the direct labor hours. So managers should know how to use and allocate costs more efficiently.
However, for the purpose of this research, the costing techniques the researcher shall be examining will be limited to Marginal costing, Absorption costing and Standard Costing being the commonest traditional costing techniques as time and space will not allow him examine other costing techniques such as historical costing and uniform costing e.t.c. The institute of Cost and Management Accountant defines Standard Costing as a “predetermined cost which is calculated from management standard of efficient operations and relevant necessary expenditure”. The usefulness of information provided from the analysis of variance related to standard costing has been challenged. Attention to quality some critics say is inadequate. Others have proposed that quality considerations can be incorporated into standard costing (See Cheatham and Cheatham, 1996). On the other hand, Absorption costing is a method for appraising or valuing a firm’s total cost including all manufacturing costs as product costs, regardless of whether they are variable or fixed and therefore it is frequently referred to as the full cost method. (Seiler, 1959; Chandra and Paperman, 1976; Lal and Srivastava, 2008) though confronted with the problem of arbitrary apportionment of fixed cost. While under variable costing, only those manufacturing costs that vary with output are treated as product costs. This would usually include direct material, direct labor, and the variable portion of manufacturing overhead. Variable costing is sometimes referred to as direct costing or marginal costing. Fixed manufacturing overhead is treated as period cost just as selling and administrative expenses. Thus in inventory valuation or in cost of goods sold fixed manufacturing overhead is not treated as product cost in marginal costing technique. (Seiler, 1959; Chandra and Paperman, 1976; Lal and Srivastava, 2008; Swamidas, 2000)
1.2  STATEMENT OF THE PROBLEM
From the background of our study above and brief review of relevant literature the following problems were identified:
1. There is widespread complain that traditional cost accounting techniques such as standard costing ,marginal costing and absorption costing have been found obsolete and deficient for today demand and greater cost accuracy
2. Managers and Accountants are confused about which of the costing techniques to use which will ensure effective cost control and will enhance effective management decision
3. Inadequate knowledge as to whether or not quality considerations can be incorporated into each of those costing techniques
4. The assignment of indirect costs to products, departments, and other cost object has been a long standing problem in cost accounting
1.3  RESEARCH OBJECTIVES
The main objectives of this research is to determine the following
1. The degree of usefulness of different managerial/cost accounting techniques (marginal costing, standard costing and absorption costing).
2. To find a long lasting solution to the problem of apportionment of indirect cost
3. To carry out an empirical study to ascertain whether our traditional costing techniques are still relevant for today’s demand and greater cost accuracy.
4. To know if quality consideration can be incorporated into each of the costing techniques.
5. To know which of the costing technique is most effective for cost control and will enhance management decision.
1.4  RESEARCH QUESTIONS
Some burning issues on the researchers mind will be looked at critically with the hope of proffering solutions to them and are as follows: What is the most appropriate basis for the apportionment of fixed cost Are traditional costing techniques still relevant for today’s demand and greater cost accuracy. Which of the costing techniques is most effective for cost control and will enhance management decision. Can quality consideration be incorporated into each of the costing techniques.
1.5  RESEARCH HYPOTHESIS
In other for our study to be properly guided, the following null
(Ho ) and alternative hypothesis
(Hi ) have been formulated:
HYPOTHESIS ONE:
Ho : Traditional costing techniques are not relevant for today’s demand and greater cost accuracy.
Hi : Traditional costing techniques are relevant for today’s demand and greater cost accuracy.
HYPOTHESIS TWO
Ho : Quality consideration cannot be incorporated into traditional costing techniques
Hi : Quality consideration can he incorporated into traditional costing techniques.
1.6  SCOPE AND LIMITATIONS OF THE STUDY
This section explores the confines within which our research will be carried out and the circumstances beyond the researcher’s circumstances which might affect our study. This research will explore our traditional costing techniques such as standard costing marginal costing and absorption costing to the fullest while the researcher will use Coca-Cola Bottling company as the case study from which the population for our research will be examined. In addition, constraint such as limited lime, inadequate finance and inability to recover all questionnaires used in gathering data might he encountered and this might have a negative impact on our study. However the researcher will put in his best in ensuring a worth while research is conducted.
1.7  SIGNIFICANCE OF THE STUDY
The major objective of management in any organization is to minimize cost and maximize profit by avoiding wastage of resources. This research will however be of interest to Nigeria’s manufacturing industry as it will: Enlighten on how best to minimize the cost of production through effective cost control while maintain the quality of her output Show us how to judiciously utilize our scarce resources in other to avoid wastage It will help the sector to be quality driven which will increase customers patronage Enhance the productive capacity of the sector so that her contribution to the GDP ( Gross Domestic Product) will be significant to accelerate the pace of economic growth and development
1.8  HISTORICAL BACKGROUND OF CASE STUDY The Coca- Cola Bottling Company is an American multinational, retailer and marketer of non alcoholic beverage concentrates and syrup which has its headquarters in Atlanta Georgia. The company is best known for its flagship product Coca-Cola, invented in 1886 by Pharmacist John Smith Pembemton in Columbus Georgia. The Coca-Cola formula and brand was Bought in 1889 by Asia Candler who incorporated the company in 1882.Beside its namesakes Coco-Cola beverage, Coca-Cola currently offers more than 500 brands in over 200 countries and serves over 1.7billion people each day Tab was Coca-Colas first attempt to develop diet soft drink using Saccharin as a sugar substitute introduced in 1963l, the product is still sold today, although its sales have swindled since the introduction of Diet Coke. The company also produces a number of other soft drinks. During the 1990s, the company responded to growing consumer’s interest in healthy beverages by introducing several new carbonated beverage brands. These includes: Minute Maid, Juices to go. Powerade Sports beverage flavored tea Nestea (in Joint venture with Nestea) etc.
1.9   DEFINITION OF TERMS
1. Marginal Costing: The C. I.MA London defines marginal costing as “a techniques of costing which aims at ascertaining marginal costs, determining the effects of changes in costs, volume, and price c.tc. on the Company’s profitability, stability etc. and furnishing the relevant data to the management for enabling it to take various management decisions by segregating total costs into variable and fixed costs.”
2. Standard Costing: Standard Costing is a technique of cost accounting which compares the standard cost of each product or service with actual cost to determine the efficiency of the operation, so that any remedial action may be taken immediately. 3. Absorption Costing: Absorption Costing is also termed as Full Costing (or) Orthodox Costing. It is the technique that takes into account charging of all costs both variable and fixed costs to operation
4. Direct Cost: These are cost that are easily traced to a product or cost unit to a cost center or some specific activity e.g cost of wood for making furniture. It is also called traceable cost
5. Indirect Cost: These are difficult to trace to a single product. They are common to sever al products e.g. Salary of a factory manager. It is also called common cost. 

Get the Complete Project

This is a premium project material and the complete research project plus questionnaires and references can be gotten at an affordable rate of N3,000 for Nigerian clients and $8 for International clients.

Click here to Get this Complete Project Chapter 1-5

You can also check other Research Project here:

1, Accounting Research Project

2. Adult Education
3. Agricultural Science
4. Banking & Finance
5. Biblical Theology & CRS
6. Biblical Theology and CRS
7. Biology Education
8. Business Administration
9. Computer Engineering Project
10. Computer Science 2
11. Criminology Research Project
12. Early Childhood Education
13. Economic Education
14. Education Research Project
15. Educational Administration and Planning Research Project
16. English
17. English Education
18. Entrepreneurship
19. Environmental Sciences Research Project
20. Guidance and Counselling Research Project
21. History Education
22. Human Kinetics and Health Education
23. Management
24. Maritime and Transportation
25. Marketing
26. Marketing Research Project 2
27. Mass Communication
28. Mathematics Education
29. Medical Biochemistry Project
30. Organizational Behaviour
31. Other Projects
32. Political Science
33. Psychology
34. Public Administration
35. Public Health Research Project
36. More Research Project
37. Transportation Management
38. Nursing

Need a Project Writer for a Different Topic

• MSC PROJECT WRITING SERVICES
• MBA RESEARCH PROJECT WRITING SERVICES
• Research Project Writing Services in Lagos Nigeria (Professional Writers) -Law, MSc, MBA,PhD, Dissertations, Thesis, Assignment, Speech
• Masters Research Project Writer in Lagos Nigeria
• MBA Research Project Writer in Lagos Nigeria
• LOOKING FOR A WRITING SERVICES FOR AN URGENT ASSIGNMENTS OR PROJECT WORK
• PROFESSIONAL WRITING SERVICES IN LAGOS NIGERIA (TERM PAPER, SPEECH WRITING, ASSIGNMENT, THESES, DISSERTATIONS, RESEARCH PROPOSAL, PROJECT WRITING SERVICES etc)
• BUSINESS ADMINISTRATION RESEARCH PROJECT WRITER IN LAGOS NIGERIA
• CONSULT A RESEARCH PROJECT WRITER IN LAGOS NIGERIA (PH.D, MBA, MSC, M.ED, BSC)
• MANAGEMENT RESEARCH PROJECT WRITER IN LAGOS NIGERIA
• Education Research Project Writer in Lagos Nigeria
• Environmental Sciences Research Project Writer in Lagos Nigeria
• Guidance and Counselling Research Project Writer in Lagos Nigeria
• Human Kinetics and Health Education Project Writer in Lagos Nigeria
• Early Childhood Education Research Project Writer in Lagos Nigeria
• Christian Religious Studies(CRS) Research Project Writer in Lagos Nigeria
• Educational Administration and Planning Research Project Writer in Lagos Nigeria
• Political Science Research Project Writer in Lagos Nigeria
• Accounting Research Project Writer in Lagos Nigeria
• Economics Research Project Writer in Lagos Nigeria
• Management Research Project Writer in Lagos Nigeria
• Marketing Research Project Writer in Lagos Nigeria
• Public Administration Research Project Writer in Lagos Nigeria
• MBA Research Project Analysts
• In Need of MBA Research Project Writer in Nigeria
• MBA Dissertation Research Project Writer
• MBA Project writer
• EDUCATION DEPARTMENT PROJECT WRITING SERVICES
• BACHELOR OF SCIENCE (BSC) DEGREE PROJECT WRITING SERVICES(B.ED,B.A,B.SC)
• MASTER OF BUSINESS ADMINISTRATION (MBA) RESEARCH PROJECT WRITING SERVICES
• MASTER OF SCIENCE (MSC) RESEARCH PROJECT WRITING SERVICES
• POST GRADUATE RESEARCH PROJECT WRITER
• POST GRADUATE DIPLOMA (PGD) RESEARCH PROJECT WRITER
• MASTER RESEARCH PROJECT WRITER
• MASTER DEGREE RESEARCH PROJECT WRITING SERVICES
• POSTGRADUATE RESEARCH PROJECT WRITING SERVICES
• MASTERS RESEARCH PROJECT WRITING SERVICES
• RESEARCH PROJECT WRITER
• EXPERT IN RESEARCH PROJECT/THESIS/DISSERTATION WRITING SERVICES IN LAGOS NIGERIA
• HIRE A PROFESSIONAL BSC/HND RESEARCH PROJECT WRITER
• HIRE A PROFESSIONAL MBA/MSC RESEARCH PROJECT WRITER
• HIRE A PROFESSIONAL THESIS WRITER IN LAGOS NIGERIA
• SC/M.SC/MBA/PGD RESEARCH PROJECT WRITER IN LAGOS NIGERIA
• Master Degree Research Project Specialist/Writer in Lagos, Nigeria
• Hire A Research Project Writer in Lagos Nigeria
• Research Project Specialist in Lagos, Nigeria

• Education