COST ACCOUNTING INFORMATION AND PRICE DETERMINATION
(A CASE STUDY OF NIGERIAN BREWERIES PLC ENUGU)
The topic “Cost Accounting Information and Price determination” is aimed at establishing how adequate accounting information can assist management in price determination. Accounting is a living subject, it happens everyday in business organization. So far, cost allocation which is said to be that part of cost attribution which changes a specific cost to a cost center or cost unit can be said to be used to obtain a mutually acceptable price. But price determined from efficient income statement approach or contribution margin approach will most probably approximate the price of the product to it’s value.
TABLE OF CONTENTS
Title page - - - - - - - - i
Approval page - - - - - - - - ii
Dedication - - - - - - - - iii
Acknowledgement - - - - - - - iv
Abstract - - - - - - - - - v
Table of contents - - - - - - - vi
INTRODUCTION - - - - - - - 1
1.1 Background of the study - - - - 6
1.2 Statement of the problem - - - - 12
1.3 Objectives of the study - - - - - 13
1.4 Research question - - - - - - 14
1.5 Significance of the study - - - - - 15
1.6 Scope of the study - - - - - - 17
1.7 Definition of terms - - - - - - 19
REVIEW OF RELATED LITERATURE - - - 21
2.1 Costing methods - - - - - - 22
2.2 The flow of cost in manufacturing firm - - 24
2.3 Other of theoretical work on cost and pricing - 37
2.4 Limitations of cost oriented pricing - - - 39
2.5 The nature of pricing problem and Theories - 40
2.6 Cost based pricing theories - - - - 43
2.7 Other variables that influence price determination in pricing decision. - - - - - - 45
RESEARCH DESIGN AND METHODS - - - 53
3.1 Research Design - - - - - - 54
3.2 Area of study - - - - - - - 55
3.3 Population of study - - - - - - 55
3.4 Sampling method - - - - - - 56
3.5 Research instrumentation - - - - 57
3.6 Validity and Reliability of the Research instruments.57
3.7 Sources of data - - - - - - 58
3.8 Method of investigation - - - - - 59
PRESENTATION AND ANALYSIS OF DATA - - 81
4.1 Presentation and analysis of result - - - 93
SUMMARY OF FINDINGS, CONLUSION AND RECOMMENDATION - - - - - - 94
5.1 Findings - - - - - - - - 94
5.2 Conclusion - - - - - - - 95
5.3 Recommendations - - - - - - 96
Bibliography or Reference - - - - 98
Appendix - - - - - - - - 100
Questionnaire - - - - - - - 101
Cost accounting is being experienced in every organization and it’s information makes for the success of the organization. Therefore, accounting information has a special purpose which is “decision making”. This task of the accountant is to transform raw data into information.
Cost and management accounting are the parts of accounting discipline which have developed to meet up with the progress in technological advancement have broadened the boundaries of accounting profession and made it more useful to modern business enterprise.
Cost accounting is probably the field of accounting which has developed most greatly within the last half of this contriving (success) and there is no doubt about it’s growing importance. This is partly because of the growing complexity of modern production methods, which results in greater capital investment and higher proportion indirect costs, and partly a reflection for growing competition and widening markets in the business world.
All there factors necessitate the keeping of systematic and accurate records which will show the cost of goods produced. The job of accounting has shifted emphasis and the focus from recording, interpreting, and analyzing historical financial transaction, to a more challenging task of setting controls, devising the most efficient method of collecting, interpreting, analyzing and transformation of cost into useful information which is used by management in decision making which affects the future.
A cost management accountant is now deeply involved in helping management to set up control systems that make for co-ordination of all the activities of an organization thereby ensuring proper and purposeful direction and effective control.
The cost accountant withdraw an information provided by the financial accounting system but he will also need to obtain much more details of the internal workings of the business. He will use data in monetary and non monetary form of capacity of material used, products manufactured, machine ruining hour, ideal time etc, he is concerned with finding the actual cost. The emphasis on decision making in recent years had bought together different disciplines which once where viewed as separate areas of knowledge. The accountant has to be knowledgeable over a bread area if he is to be sufficient in providing information, which is relevant and useful for decision making. The great task of an accountant is to transfer raw data into information as an information specialist, the management accountant must be aware of the nature of information and it’s attributes.
Information has no value on it’s own, rather the value is being derived from the changes in decision making caused by the information being available, more accurate information or earlier information is not necessarily better information only if it improves the resulting decisions, the