THE IMPORTANCE OF COST ACCOUNTING SYSTEM IN MANUFACTURING INDUSTRIES.[A CASE STUDY OF NORTHERN CABLE PROCESSING
MANUFACTURING CORPORATION (NACACO)]
TABLE OF CONTENT
Title page
Declaration
Approval page
Acknowledgement
Abstract.
Chapter one
Introduction
1.1
Statement of general problem
1.2
Objective of the study
1.3
Statement of Hypothesis
1.4
Significance of the study
1.5
Limitation of the study
1.6
An overview of the organization
Chapter two
Literature review
2.1
Definition of cost accounting
2.2
Standard cost introduction
2.3
Variance analysis and classification
2.4
Budget and budgetary control
2.5
Marginal cost
2.6
Break even point analysis
Chapter three
Research methodology
3.1
Interview
3.2
Population and sample size
3.3
Sampling technique
3.4
Personal observation
3.5
Justification of choice
Chapter four
Data
analysis and presentation
4.1
Cost accounting department
4.2
Financial department
4.3
Production department
4.4
Output come of hypothesis
Chapter five
Summary, findings, conclusion and recommendation
5.1
Summary
5.2
Findings
5.3
Conclusion
5.4
Recommendation
5.5
Appendix
5.6
Bibliography
5.7
Reference
CHAPTER ONE
1.0 INTRODUCTION
Cost
accounting is considered as the managerial planning and control activities
furnishing management with the necessary accounting tools to plan, control and
evaluate operation. The term cost accounting as however published by the
institute of cost and management accountant is define as “the application of
costing and cost accounting principles, methods and techniques to the science
art and practice of cost control and the ascertainment of profit”. It includes
the presentation of information derived for the purpose of management decision
making.
The
basic difference between a merchandized business and a manufacture is that merchant
purchases merchandise in a ready – to sell condition whereas the manufacturer produce
the good it sells. In a merchandising business the cost of goods available for
sale is based upon the cost of purchase in a manufacturing business on the
other hand the cost of manufacturing the finished goods, as a result of this,
there is the needs for every manufacturing business to be cost conscious in the
course of manufacturing goods.
The
cost accounting system depends upon the purpose for which the management requires
the information for many Purposes such as control, decision making and
determination of price.
1.1
STATEMENT OF GENERAL PROBLEMS
The
production of items is not problem but knowing the cost involved during such
production is the issue at stake. One just have to recover the investment
committed in the production of an item through accounting for such cost and
passing it to either the middle men or consumers Iclho pay for the items. This
has created room for the existence of a production circle in most of our
industries now. To account for the production of an items materials, labour and
overhead must have their own share of cost which resulted to be the complete
production of the production.
To
this end, manufacturer find it littie bit difficult to adequately account for
the production cost they incurred and not being able to recover from the item
produced, he refinancing power of the organization concerned is reduced in one
way or the other, therefore, the producer has to be conscious of cost incurred
in the cost at a certain period of time the financing of the project plan becomes adversely
affected or ever not possible.
1.2
OBJECTIVE OF THE STUDY
The aims and objective
of this study are to evaluate the cost accounting system, which brings out the
real situation and existence of an organization. It is aimed at the determining
the level of adequacy of cost accounting in the organization’s production
activities. Through evaluating the system, the efficiency or inefficiency of
such system will come to light which will create opportunity for discussing the
ways by which an organization can account for cost of production adequately.
Without excluding
certain cost incurred during the production. The study is aimed at providing solution
to the problems of process cost accounting in industries which one way or the
others do affect performance within the industry. It’s aimed at analysis the
relevant of cost accounting system an industry and providing solution weaker
system.
1.3
STATEMENT OF HYPOTHESIS
1. Alternative Hi – effective use of cost
accounting as a means of control in manufacturing industries cannot minimize
cost – Un11Ho – effective use of cost accountings as a means of control
manufacturing industries cost minimize cost – UU! IHO effective use of cost
accounting as a mean of control.
2. Alternative – an efficient costing system helps an undertaking to ascertain it’s
cost of operation.
1.4
SIGNIFICANCE OF THE STUDY
The significance of the
study can be reviewed in different perspective. The study serve am importance
toward the writers programme as a part of the Kaduna polytechnic requirement which enable
the completion of the national diploma programme.
1.5
LIMITATION OF STUDY
Limitation of study are
the constrains that restricts the writer from elaborating more on the project.
In other words, they are restriction
encounter by the writer in course of writing his project, which are beyond his
control. The study was made based upon the presence of some restrictions. It
will have been more them what it is but due to the constraints, this is what
the writer was able to achieve.
The major obstacle is
the co-operation of respondent quite a number of responses were made but not to
the extent of warranting a through knowledge of the organization’s activities
as a result, the study unable to meet the writer’s objective. The writer was
faced with financial constraint and as a result could not go round getting more
information for writing the project. This to some extent hampered the study.
Further more,
availability of time for the research work was also a constraint to the study.
This is due to the fact that the most writers time was spend in attending
lectures writing semester test and assignment.
1.6
AN OVERVIEW OF THE ORGANIZATION
Northern cable
processing manufacturing company limited (NOCACO) was incorporated in June with
the aim of supplying vehide assembly plant with locally made cable and wires.
The company’s equity share capital were distributed 40% the Nigeria share
holders and 60% to the foreign Partners from Germany. The above distribution was
due to the technical nature of the activities to be carried out to satisfy the
schedule III of the enterprises promotion decree. The firm started with
strength of 96 staff at the commencement of production, the firm now employ
over 550 staffs and having the recognition as one of the most important cable
manufacture in the northern Nigeria
producing in accordance with national and international standards. NOCACO is
correctly producing cable of about 400 different types. These cable including
the house wiring cables. The insolated aluminum services cable, aluminum
overhead line which is produced breed and steel re-enforce as well, the copper
underground cables immured and un-armored as well as flexible cable fastening
for the automobile industry and or the assemblers of air condition fridge and
fretters. The firm principal factor of performances. Is the quality of its
products. As a result, the company places a high premium on the quality of its
products it designs and produce high quality of its products in accordance with
national and international standard such as Nigeria industrial standard (NIS). International
Electron – TECHNICAL COMMISSION (IEC). British standard and German Industrial
standard to specific customer requirement .
The firm carries out
rigorous quality control test on its products at every stage of the production
process rather – then at the first inspection, so as to maintain the high
standard throughout the length of conductor of cable.
The high quality
maintenance in the organization can be proved the award worn by the company
during one period or the other, the award are:
Nigeria industrial standard silver award, winner of PVC
insolated (non armoured) electric cable for power of lighting and also hold the
ordinary award on aluminum conductor.
Correctly,
NOCACO has won the Nigeria
best cable and wire production. The company is located in the heart of the Northern
State of Nigeria Kaduna. Head office and factory is located along Marchibi
road, Kakuri Industrial estate Kaduna.