ABSTRACT
This research work
tried as much as possible to look into the impact of cost control in
manufacturing industries. In pursuance of these objectives there will be head
to highlight the followings: make detailed explanation of the methodology
involved in the heading of the cost control in Innoson Nigeria limited. Chapter
one of this project is based on the background of the study, statement of
problem, objective of the study, the research questions, scope of the study in
the manufacturing industry concern, it also deals with the significance of the
study, limitations and definition of terms in the cost control system. Chapter
two deals with the literature review where definition and meaning of cost
control, control methods, needs for cost control, importance, factors leading
to the need for cost control, benefits of cost control and management
requirements for adequate control, modern development, types, merit, cost
system and cost control as it affects Innoson Nigeria limited was being
mentioned here. Chapter three deals with the research methodology like area of
the study population, sample and sampling procedure method of data collection,
the research, design and others. Chapter four based on data analysis and
interpretation of the study. It also deals with the findings that are concern
mainly with that method adopted. Chapter five deals with summary conclusion and
recommendation of the study. It recommended that, if more accurate cost control
records are kept the organization would achieve more than their present value of
their production.
TABLE OF CONTENTS
Cover page = = = = = = = = = i
Title page = = = = = = = = = = ii
Dedication = = = = = = = = = iii
Approval = = = = = = = = = = iv
Acknowledgement = = = = = = = = v
Abstract = = = = = = = = = = vi
Table of contents = = = = = = = = vii
CHAPTER
ONE
1.0 General
introduction = = = = = = = 1
1.1 Background
of the study = = = = = = 1
1.2
statement of he problem = = = = = = 3
1.3
Objectives of the study = = = = = = 3
1.4
Research Questions = = = = = = = 4
1.5
significance of the study = = = = = = 5
1.6
Scope
of the study = = = = = = 6
1.7
Limitation of the study = = = = = = 7
1.8
Historical Background of Innoson = = = = 7
1.9 Definition
of terms = = = = = = = 13
CHAPTER TWO
2.0 Review
of literature = = = = = = = 15
2.1 Definition
and meaning of cost control = = = 15
2.1.1
Cost revenue control = = = = = 19
2.1.2
Investment cost control = = = = = 19
2.1.3
Financial cost control = = = = = 19
2.1.4
Time analysis = = = = = = = 20
2.1.5
Work measurement = = = = = = 20
2.1.6
Cost reducing = = = = = = = 21
2.1.7
Operating cost method = = = = = 21
2.1.8
Budgetary techniques = = = = = 22
2.1.9
Value analysis = = = = = = = 22
2.2 Need
for cost control = = = = = = 22
2.3 Factors
leading to the need for cost control = = 23
2.4 Benefits
of cost control and management = = 24
2.4.1
Benefits = = = = = = = = 25
2.5 Requirement
for adequate control = = = = 26
2.6 Modern
development = = = = = = 27
2.7 Types
of cost control = = = = = = 31
2.8 Merits
of cost control = = = = = = 34
2.9 Cost
system and cost control = = = = = 35
2.9.1
The operation phase = = = = = = 37
2.9.2
The feedback phase = = = = = = 37
2.10
Cost control techniques = = = = = = 38
2.11
Cost control as it affects Innoson
Nigeria
limited
Materials. = = = = = = = 41
CHAPTER THREE
3.0 Research
methodology = = = = = = 45
3.1 Research
design = = = = = = = 45
3.2 Sources
of data collection = = = = = 45
3.3 Area
of the study = = = = = = = 46
3.4 Population
of the study = = = = = = 46
3.5 Sample
and sampling procedure = = = = 47
3.6 Instrument
for data collection = = = = = 49
3.7 Method
of data collection = = = = = = 50
3.8 Method
of data analysis = = = = = = 50
CHAPTER
FOUR
4.0 Data
presentation and analysis = = = = 52
4.1 Introduction = = = = = = = = 52
4.2 Data
presentation and analysis = = = = 53
CHAPTER FIVE
5.0 Summary
of findings, conclusion and recommendation=66
5.1 Summary
of findings = = = = = = 66
5.2 Conclusion = = = = = = = = 67
5.3 Recommendations = = = = = = = 68
Bibliography = = = = = = = = 70
Appendix = = = = = = = = = 71
Questionnaire = = = = = = = = = 72
CHAPTER ONE
2.0
INTRODUCTION
2.1 BACKGROUND OF THE STUDY
Management
as a discipline is becoming more dynamic in nature as a result of complexities
that surrounds our business world. Numerous routine planning and control
activities formally performed by clerk now been developed into sophisticated
functions with far reading effect on cooperate objective and profits. Cost
control, a vital element of cost management is one of such functions.
According to Adetayo (1998), cost can be
defined as the monetary measures of value consumed acquired. It is the amount
of expenditure (actual or national) incurred on or attributable to a specific
thing or activity.
(Eddy,
1991), defined cost as the amount of goods or the provision of a service. In
other words it means the amount of expenditures incurred on a particular
project or venture over a given period of time. It could be fixed cost,
variable cost and opportunity cost etc.
In
addition, objective of cost analysis is the process of discovering the purpose
in which factors of production has been used for concise information in
management decision. However, coast control is defined as a profit maximized
monetary and a central criterion of cost. This means that a cost of controlling
must be related to decision of importance for the success of operation as a
whole, within the scope of planning and controlling process.
2.2 STATEMENT OF HE PROBLEM
Cost
control problems are not perculiar to manufacturing industries only but also
extended to armed forces, government parastalat and other payee agencies.
The
following are the cost control problems in manufacturing industries:
(i)
The divisible and manner of control in the
company.
(ii)
The company is facing the problem of setting
budget and standard cost.
(iii)
The problem of comparing the total accurate
standard or variance.
2.3 OBJECTIVES OF THE STUDY
The
main purpose of this study is to make official review and demonstration cost
control in a manufacturing organization.
Costing
system differs from one industry to another
In
pursuance of the objective there is a need to highlight the following aids:
i)
Identify the cost Nigeria limited.
ii)
Determine the importance of cost control in
a manufacturing concern, which is Innoson Nig. Ltd.
iii)
Make detailed explanation of Innoson
Nigeria limited.
iv)
Assess the effectiveness of cost control in
Innoson Nigeria limited (cost and budget).
v)
Determine the unit cost of production cost
1.4 RESEARCH QUESTIONS
These
are the questions which the researcher used when writing a project or making a
research in a project work:
i.
What is the relationship between cost
control and profitability of Innoson Nig. Ltd?
ii.
Does budget help to ensure effective cost
control and profit growth in Innoson Nig. Ltd?
iii.
What are the requirements for ensuring
effective cost control system in Innoson Nig. Ltd?
iv.
To what extent does cost control affect the
system of production in Innoson Nig. Ltd?
1.5 SIGNIFICANCE OF THE STUDY
This
study will be beneficial to both large and small scale industries in the area
of adequate budgeting. There will be a mutual agreed budgets or standards where
appropriate. This will aid adequate decision making for these large and small
scale industries.
The study will also be beneficial to both
the state and federal Government in the area of controlling the cost of goods
and services in the manufacturing industries. There would be recommendations at
the end of this study in order to aid the Government on how to control the cost
of goods and services.
This study will also be beneficial to the
students on the area of their academics. The study will also help other
students on how to control the cost of goods and services if eventually they
find themselves in any industry.
1.6 SCOPE OF THE STUDY
One
of the primary responsibilities of management is to set up and implement cost
control in industries. The project work will examine critically the cost
control system and factory management used in the industries classification of
cost reduction and standard costing. However, the work will not be studied in
departments because of some financial constraints and problem of planning.
1.7 LIMITATION OF THE STUDY
i.
Need for coast control.
ii.
Definition and meaning of cost control.
iii.
Factors leading to need for cost control.
iv.
Benefits of cost control and management.
v.
Requirement for adequate controls.
vi.
Modern development.
vii.
Types of cost control.
viii.
Merits of cost control.
ix.
Cost system and cost control.
x.
Cost control techniques.
xi.
Cost control as its affects in Innoson
Limited materials.
1.8 HISTORICAL BACKGROUND OF INNOSON
Innoson Nigerian limited is an indigenous
bluechip Company, which was incorporated in 1982, by (Chief Innocent Chukwuma).
Innoson Nig. Ltd. Engaged extensively in
the importation, manufacturing, assembling, and marketing of automotive
components, accessories, motorcycles, motorcycle spare parts, and tyres and also other plastic products at
Nkwo Nnewi, Anambra state.
However,
Being the first indigenous company after Leventis and bouder enterprises to
event Motorcycle into Nigeria was an eye-opener
and a strong signal that Innoson was destined to be great. In 1994,
Innoson embarked on a mission that gave Nigerian economy a boost.
Chief Innocent Chukwuma, a man of vision
divided in with two business ideas: “Invention and Innovation†simply to create a unique idea that would
usher in a breakthrough in motorcycle
spare parts while later was to make positive change in efficiency, productivity
and quality.
The first Nigerian whose invention of
having 240 units of complete Knock down (CKD) motorcycles instead of normal 40
units of built up machines in a container thereby crashing the prevailing
market price down from N100,000 to N50,000.
Innoson brand has tremendously
contributed successfully towards the transfer of Chinese technology to Nigeria.
The evidence on the ground proved that on record, the Innoson group boosts of
over 7,000 Indigenous workers of divers disciplines scattered in various
subsidiaries nation wide.
Board
of Directors
Managing
Directors
Assistant
general manager marketing
General
Manager (Administration)
Production
Directors
Assistant
general manager (production)
Industrial
Relation manager
Sales
manager
Senior
Accountant
Assistant
Maintenance
Quality
control superintendent
Procurement
manager
Source: field survey
2013
From
the above organization chart, the managing director is responsible to the board
of directors, four departmental heads are directly responsible to the managing
directors. The departments are administration department (headed by AGM.
marketing), the account/finance department (headed by Senior accountant) and
the production department. (headed by the production director).
It must be emphasized that the production
director has more authority than the other three department heads. Infact, the
occupies the instated position of the
deputy managing director.
The managing director is the chief
executive. He sees to the overall achievement of the programmed enunciated by
the board of directors in collaboration with the management and non management
staff of the company.
The production department headed by the
production directors takes care of production services, technical and
engineering service as well as quality control.
The account finance department headed by
the senior accountant is responsible by the finance functions like preparation
of periodic financial statement, provision of funds and its effective
utilization.
The marketing department, headed by the
AGM (marketing) is responsible for marketing and sales of all the company’s
products.
Administration department, (Headed by the
AGM Admin) is responsible for personal matters (recommitment, staff training,
staff discipline and staff welfare) and other administration function like:
public relations, and effective implementation of company’s objectives.
1.9 DEFINITION OF TERMS
i. Cost: this
is defined as the total amount incurred for the purpose of producing goods or
rendering services.
ii. Cost unit:
this is a quantitative unit of products or services in relation to which cost
are ascertained, related or expressed.
iii.
Cost
control: this is management by measurement and covers both
routine comparism of performance against standard and corrective and exploitive
action.
iv.
Work
measurement: it is the best of identifying the specific
assignment and allocation of maximum period for its execution.
v. Cost Reduction: this
is a process whereby permanent savings are made within any reduction in
quantity and or usefulness of the production.
vi.
Cost
System: this deals with managerial element task which makes the
determination of the cost unit.
vii.
Marginal
Costing: this is costing technique whereby fixed and variable
costs are differentiated. Only variable cost are charged to cost units and
fixed costs are written off in full each period.
viii.
Standard
costing: this is a technique which establishes predetermined
cost and actual cost as they are incurred.
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