Study On Construction Cost Accounting System Of State Owned Road Contractor A Case Study On Ethiopian Construction Works Corporations Transport Infrastructure Sector

This research investigated the cost accounting system of state-owned road contractor byrntaking Ethiopian Construction Works Cooperation‟s transport infrastructure sector as arncase study. The construction industry consumes different resources such as, material,rnmanpower and equipment which have to be managed properly to ascertain the profit. Thernresearch is based on the problem of ascertaining the cost of each cost object in order tornevaluate the project status and helps the decision makers to make corrective measure onrntime. The proper implementation of costing system is necessary to determine thernprofitability of each cost object whereby management can identify whether the costrnobject is contributing profit or loss. Both primary and secondary data collection werernused in this research. The primary data were obtained from the company using arnquestionnaire and secondary data were obtained from company cost records, reports, andrncost accounting implementation manuals. Desk studies by randomly selecting threernongoing projects were done for detail study on current system. Based on the collectedrndata, the detailed analysis has been conducted to find answers for the research questionrnand modified costing system was proposed. rnThe study found out that the organization does not have a structured and typical costrnaccounting system. The respondents revealed that the company‟s current system is weakrnwhen evaluating based on different requirements of the costing system. According to thernresearch, the ability of the current system in providing relevant information to decisionmakersrnforrnfuturernplanningrnandrndecisionrnmakingrnisrnpoor.rnLackrnofrntrainingrnonrnupdatedrncostrnrnaccountingrntechniques,rndifficultiesrninrndatarncollectingrnandrngathering,rnandrnlackrnofrnadequaternrninformationrnrnon cost data are the mostly occurred problem during implementing costingrnsystem in the organization. It is recommended that the company should use the proposedrnsystem of cost accounting to overcome the shortcoming of the current system based onrnthe data findings. The proposed costing system is expected to improve responsibilityrncenter identification, cost determination, indirect cost allocation, variance analysis atrnactivity and resource level and data presenting format.

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