ABSTRACT
This study is designed to provide knowledge for
costing information and price determination.
The need for cost
accounting came with increased industrialization, engineering an expansion in
manufacturing. It is therefore obvious
that in efficient system of costing is essential for industrial control.
In period
of boom, manufacturers are able to show profit notwithstanding the leakage
which pass unchecked, but in periods of trade competition concealed
inefficiencies have to track down and rigorous control must be exercised to
ensure even modest margin profit.
There is not
yet an agreed best method of costing products though it may be helpful to
recognize that cost allocation are being used to obtain a mutually acceptable
price and not necessary to portray caused and effect relationship of cost
incurrence. But price determination
from cost under efficient operation through efficient cost system will most
probably approximate the price of the product to its value.
TABLE OF
CONTENTS
Title page
Approval page
Dedication
Acknowledgement
Abstract
Table of content
CHAPTER ONE:
1.0
Introduction
1.1 Statement
of problem
1.2
Purpose of study
1.3
Significance of limitation of study
1.4
Scope and limitation of study
1.5
Definition of terms
CHAPTER TWO:
2.0
Literature Review
2.1 Cost
determination
2.2
Cost Control
2.3
Fixed and variable cost
2.4
Natural and functional classification cost
2.5
Other theoretical work on cost and pricing
2.6
Price flexibility
2.7
The Nature of Pricing problem
2.8
Limitation of cost oriented price
2.9
Cost bread pricing theories
2.10
Price to achieve corporate objectives
CHAPTER THREE:
3.0
Summary of Study
3.1 Discussion
of findings
3.2
Conclusion
3.3
Recommendation
Bibliography
CHAPTER ONE
1.0
INTRODUCTION:
Accountancy has been defined by GLAUTER and
UNDERDOWN, in their book titled “Accounting theory and practice as “a reporting
activity that forms part of any management information system. In this regard, accountings is often
explained as sciences of activities that are connected and form successive
steps starting with observing, the collecting, recording, analyzing and finally
communicating accounting information to its users.
The study
of modern cost accounting yields insight regarding both accountants role and
managers role in an organization because managers want to know how accountants
measure performance and often depending upon accounting data for guiding their
decisions.
Cost
accounting has a major purpose of accumulating the cost of an organizations
products and services. This aspect is
regarded as product costing purpose.
1.1 STATEMENT OF PROBLEM:
A view shared by previous researcher on this topic
that there has been a shortfall in the utilization of cost accounting
information in some organization and their pricing policy decision making. It is right of this that this work attempt to
suggest a good system which comprises a set of procedure, records and facilities
that have to do with the systematic and routine compilation and dissemination
of cost information and price determination.
AMONG THE
PROBLEMS TO BE ANALYSED ARE:
(i) To
highlight on management inadequate concern over proper pricing guide through
cost information.
(ii) Necessary
conditions for a costing system.
(iii) Evaluating the
present state of the application of the cost information in the determination
of price.
(iv) Appropriate
basis of preparation of the cost.
1.2
PURPOSE OF STUDY:
The purpose of this study will help to determine
how, what the researcher has learnt as theories is practicalized in real life
situations, relating to the cost accounting information and price
determination. It help the researcher to
see the practical application of the principles stated formally by the cost
accounting and determining the cause of the short fall in its application and
when applied, the advantages therein. It
also helps to determine an appropriate condition and environment for prayer
comparison and analysis of cost.
1.3
SIGNIFICANCE OF THE STUDY:
This work is intended to be of benefit to processing
business in general. It is hoped that by
improving the profitability of hoped this study has benefited the economy as a
whole.
Following
the completion of work and the result made available to them, the processor
will be in a position to re-examine their cost accounting information and price
deermination techniques and update them so as to enjoy these benefits available
to firms with good cost accounting and price determination techniques and also
avoid plugging their business into financial and operating difficulties.
Readers
will appreciate other people’s view on cost accounting information and price
determination and see the workability of this costing models and price
determination system in real life situations.
1.4
SCOPE AND LIMITATIONS OF THE STUDY:
The scope of this study is restricted to the cost
accounting information and its utilization in determining the price of
products. This paper is divided into
three chapters. The first chapter is an
introductory one and the second chapter deals with an observer view of cost
accounting information of product prices while chapter three discusses
research.
1.5
DEFINITION OF TERMS:
(i) HISTORICAL ACCOUNTS:
These are
financial statements prepared from past activities of the enterprise. Since these are actual figures of cost and
revenue obtained in the past, management can determine the price of its product
through it.
(ii) COST ACCOUNTING:
This is an element of financial management that
generates information about the cost of an organization and its
components. As such, cost accounting is
a subset of accounting in general.
(iii) INDIRECT COSTS:
There are
elements of cost that are associated with or caused by two or more cost
objective jointly, but are not directly traceable to each of them individually.
(iv) COST CONTROL:
This is the
regulation by executive action the costs of operating an undertaking
particularly where such action is guided by cost accounting.
(v) COST CENTRE:
Cost center therefore can be defined as a location,
person or item of equipment (or group of these) for which cost may be
ascertained and used for purpose of cost control.
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