Management Accounting Techniques In Manufacturing Firms (a Case Study Of Nigeria Breweries Plc. Aba)

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This project  attempts to establish  the vital role which  management  Accounting techniques play in manufacturing  firms  , A case study of Nigeria breweries plc. ,Aba .

The problem addressed under this topic were the impact of management Accounting techniques on firms profitability, decision making and management information. This study is significant, as it will help to reduce the risk involved in decision making. Literature review  was done to know what other writers are saying about the topic.

   The study covered only one manufacturing firm in Aba Nigeria Breweries  Plc, Aba , which has a total work force of 340 employees, 184 employees were selected for saying about through probability based on sampling techniques. The instrument for data collection were  mainly oral interview and questionnaire which was distributed among the categories of staff in the company in all 100 questionnaire , were returned and to test the hypotheses and insinuating the research findings.

-FINDING: In hypotheses one, it was established that profit maximization is the major objective of manufacturing the application of management accounting techniques. Hypotheses two, revealed that junior staff does not participate on decision- making of companies as they do not possess the skill to meet the challenges of such decisions. Hypotheses three and four revealed that communication network between accounting techniques and management can help greatly to ensure industrial peace. And that success of manufacturing firms is dependent on the information provided by management accountants.

-CONCLUSION: based on the finding one can conclusively affirm that management accounting employ management accounting techniques in decision making and that firms cannot do without management accounting practices.

-         RECOMMENDATIONS: management should adopt techniques that would aid attainment of organizational goals. Techniques employed should be constantly appraised to remove possible areas of weakness





Title   page                                                                                              i

Approval page                                                                                       ii

Dedication                                                                                             iii

Acknowledgement                                                                                iv

Abstract                                                                                                v

Table of content                                                                                   vi



1.1     Introduction

1.2      Statement of problem

1.3     Purpose of the study

1.4     Significance of the study

1.5     Statement of hypotheses

1.6      Scope of the study

1.7      Limitation of the study

1.8     Definition of terms


2.1    Review of Related literature

2.2    Standard costing technique

2.3    Variance (Analysis) accounting

2.4    Absorption costing

2.5    Capital budgeting

2.6    Cost- volume profit analysis

2.7    Summary of literature review



3.1 Research design and methodology

3.2 Sources of data



3.3 Sample used

3.4 Method of investigation




4.1 Data presentation and analysis

4.2 Data presentation and analysis

4.4 Test of hypotheses



5.1   Summary of findings, conclusion and recommendations

5.2   Findings

5.3   Conclusion

5.4  Recommendations




                                                           CHAPTER ONE


1.1             INTRODUCTION

Without the application of management accounting techniques no business can succeed in it’s operations and attain it’s set objectives. Moreover it’s decision making will not be guided as management accounting techniques provide adequate guide to management making at all levels.

Management  accounting is the application of accounting knowledge, techniques and skills to the provision of information designed to assist all levels of management in planning and controlling the activities of a business enterprise.

The chartered institute of management accounting (CIMA) defines management accounting as ‘an integral part of management concerned with identifying , presenting and interpreting information used for formulating strategy , planning and controlling activities , decision taking , optimizing the used of resource , disclosure to shareholders and others external to the entity , disclosure to employees, safeguarding assets.

According to dictionary definition, management accounting is defined as ‘accounting designed for or adapted to the informational needs of various levels of management.

Conclusively, management accounting therefore is primarily concerned with data gathering, analyzing , processing , interpreting and communicating the resulting information for use within the organization so that management can more effectively plan, making decision and control operations.

While management accounting is concerned with the provision of management information,    management accounting techniques is concerned with those practices in management accounting which management should adapt to facilitate management decision making.

According to T. Lucy , management accounting techniques , (1985 : 12) ‘  management accounting techniques is a method which is designed to suit the way goods are processed or manufactured or the way the service are produced’.

The techniques to be adopted by an organization depends on the purpose for which the organization that management accounting practice include those techniques as marginal costing , absorption costing , standard costing , actual costing  ascertainment , variance accounting, budgetary control, differential costing , capital budget etc. included project evaluation which checks the viability and feasibility of projects to aid effective decision – making .

Government accounting, social or national accounting and accounting in the formal sector of the economy should be noted.

In this research study Nigeria Breweries has been chosen as a care study. Nigeria Breweries Plc was incorporated on 16th November, 1946 to be a manufacturing company, under the companies ordinance, cap 38 as Nigeria Brewery ltd. On 7th January 1957, the company was changed to  Nigeria Brewery ltd on the commencement of operations in a second Brewery Aba. In 1990, when the companies and allied matters act of that year came into force , the name of the company was further changed to Nigeria Breweries Plc. With the acquisition of a controlling interest (54. 10%) in the equity of Nigeria Breweries within the Heineken group, Nigeria Breweries Plc has become a subsidiary of Heineken group. Currently NB has five Breweries at Lagos, Aba, Kaduna, Ibadan and Enugu.

The principal activity of the company is the brewing and marketing of Lager, stout and non-alcoholic malt drinks. The authorized share capital of the company is 3000,000,000 ordinary shares of 50k each while it’s issued and fully paid up share capital is N1, 890,589,564.

Over the years Nigeria breweries Plc has made tremendous success in it’s operations and has remained one of the most viable and profitable Breweries in Nigeria making based on the information provided by management accounting and the various practices adopted.



Management accounting techniques aim at providing information , which should help management to plan and control the resources of the organization in order to achieve the objectives of the organization.

To attain a remarkable performance and profitability, organization, face the problems of ascertaining which products, labour, territories, sales persons, plant division and company segment are contributing the most to the profitability of the organization and how to balance quantitative variables with qualitative variables in arriving at a definite decision in the evaluation of projects.

          In view of this, the problem treated in this research is management accounting techniques in manufacturing firms a case study of Nigerian Breweries plc, Aba.



Based on the introduction of the study and statement of the problem given above the major objective of the study are as follows:-

i.                   To evaluate the relationship between the success of manufacturing firms and management accounting techniques

ii.                 To find out whether management accountants in manufacturing firms employ management accounting techniques in data analysis.

iii.              To explore the usefulness of managerial information in carrying out effective management accounting techniques.

iv.              To investigate the categories of staff that participates in management decision making and the impact of such participation on organization’s performance.




    This study is important because it will assist in reducing the risk involved in decision making. It will help to ensure that every information is properly scrutinized before being employed into decision.

    This study will equally be of great value to managers, management of manufacturing firms , the government , shareholder and the entire populace.



   The following hypothesis were formulated and tested in the study.

   Hypothesis 1

H0:  there is no positive and significant relationship between profit maximization and the application of management accounting techniques.

  H1: there is a positive and significant relationship between profit maximization and the application of management accounting techniques.

        Hypotheses 2

H0:  The involvement of junior staff in decision making process dose not enhance the success of manufacturing firms.

H1: The involvement of junior staff in decision making process  enhance the success of manufacturing firms.

           Hypotheses 3

H0: The quality of information provided by management has no significant impact on the effectiveness of management accounting techniques

H1: The quality of information provided by management has significant impact on the effectiveness of management accounting techniques

         Hypotheses 4

H0: there is no positive relationship between the quality of accountant’s information and the success of manufacturing firms.

H1: there is  positive relationship between the quality of accountant’s information and the success of manufacturing firms.



This study is restricted to management accounting techniques as it is used in a manufacturing firm based in Aba (Nigeria Breweries Plc). It studies the extent to which management to plan and control the resources of the organization in order to achieve the objectives of the organizations.


The problems encountered during the research work were those of time , finance vastness of the area to be covered. Because of these constraints, the researcher limited the scope of this work to Nigeria breweries Plc ,Aba , in Abia state.

The study was further limited by the manner with which respondents approached questions thrown to them on some of the respondents were highly reserved in their comments, some remained unyielding to the supply needed data , while others in one way or the other were subtle and strictly courteous of the answer they supplied.



MANAGEMENT: These are combination of board of directors, general managers, functional managers and divisional managers who control the affairs of an organization.

INFORMATION: They are processed data or facts.

TECHNIQUES : These are techniques used to create efficiency in carrying out management accounting responsibilities.

DECISION: This is a choice alternative

MANUFACTURING COMPANIES: These are companies that undertake the production of goods and specialized on large scale by machinery.

PROFIT : This refers to investment (an investment is the capital committed to something which is hoped will bring in some returns of benefits.

INTERPOLATION: The process of finding odd rates of return that do not appear in published interest tables.

CONTRIBUTION: The difference between sales income and variable cost.





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Management Accounting Techniques In      Manufacturing Firms