COST VOLUME PROFIT ANALYSIS FOR PROFIT PLANNING IN MANUFACTURING FIRMS (A Case Study Of Obika Industry Nigeria Limited Nkpologwu Anambra State)
ATTENTION:
BEFORE YOU READ THE CHAPTER ONE/ABSTRACT OF THE PROJECT TOPIC
BELOW, PLEASE READ THE INFORMATION BELOW.THANK YOU!
INFORMATION:
YOU CAN GET THE COMPLETE PROJECT OF THE TOPIC BELOW. THE FULL
PROJECT COSTS N5,000 ONLY.
THE FULL INFORMATION ON HOW TO PAY AND GET THE COMPLETE PROJECT
IS AT THE BOTTOM OF THIS PAGE. OR YOU CAN CALL: 08068231953, 08168759420
COST VOLUME PROFIT ANALYSIS FOR
PROFIT PLANNING IN MANUFACTURING FIRMS (A Case Study Of Obika Industry Nigeria
Limited Nkpologwu Anambra State)
ABSTRACT
This is set
out to determine the application of cost volume profit analysis in business
decision making the constraints experienced as well as the assessment of
service coverage.
In chapter
one and two the decision makers on management is faced with a lot of problems
but when these are addressed, the cost volume profit analysis are not
adequately interpreted to management non availability of records and lack of
proper knowledge of the users in a manufacturing firm. There is therefore need
to embrace and identify the extent and nature of a accounting, services to the
business segments in their decision makings especially on the areas of finance
of the business.
In chapter
three, the researcher restricted himself to a reasonable scope, believed to give
a representative of the case understudy. Primary & secondary data were used
for data collection while interviews, personal observations and questionnaire
distribution played a vital role to the regard percentages and chi-square were
used to test the validity or otherwise used the hypothesis formulated.
In chapter
four, datas were analyzed and the following findings were made.
Most
establishments believe that using CVP when making financial decision will
render them effective and efficient management. Some companies or volume profit
analysis when making some strategic decision in business.
Lastly
chapter five, managers do not play significant role in using accounting
decisions. However manager of business needs more training to be able to serve
effectively and account should relate well with the management especially
during financial decisions to enable management carry up effective performance.
TABLE OF
CONTENTS
Title Page
Approval
Page
Dedication
Acknowledgement
Abstract
Table of
Content
CHAPTER ONE
1.0
INTRODUCTION
1.1 Overview
of the Study
1.2
Statement of the problem
1.3
Objective of Study
1.4 Research
Hypothesis
1.5
Significance/Scope of Study
1.6
Limitations of the Study
1.7
Definitions of terms
References
CHAPTER TWO
2.1
HISTORICAL BACKGROUND OF OBIKA INDUSTRY LTD
2.2
Definition of Cost Volume Profit Analysis
2.3
Graphical Approach
2.4
Traditional Cost-volume profit
2.5
Contribution cost volume Profit Chart
2.6
Profit-volume Chart
2.7
Contribution cost volume Profit Chart
2.8
Algebraic Approach
2.8.1 Net
Profit Equation
2.8.2
Contribution Margin, Contribution Margin Ration and Variable Costs Ration
2.8.3 Break
Even Profit Equation (BEP)
2.8.4
Manufacturing System
2.8.5 Mass
Production
2.9 Process
Production
2.9.1
Unique/Job Production
2.9.2 Uses
of CVP Analysis
2.9.3 Adding
or Dropping of Product Line
2.9.4 Make
or Buy Decision
2.10 Profit
Planning Decision
2.10.1
Product Pricing Policies
2.10.2
Budgets
2.11
Problems of Costs Volume Profit Analysis
2.12
Relationship between cost volume Profit
2.13 Cost
Division
2.14 Changes
in Fixed Costs
2.15 The
Drawbacks of cost-volume Profit analysis
References
CHAPTER
THREE
3.0 RESEARCH
METHODOLOGY
3.1 Research
Design
3.2 Sample
Size
3.3
Rationale for the Choice of Variables
3.4 Data
Selection and Analysis
3.5 The
Methodology for Data Analysis
3.5.1
Questionnaire
3.5.2
Personal Interview
3.5.3
Personal Observation
References
CHAPTER FOUR
4.0
PRESENTATION AND ANALYSIS OF DATA
4.1 Data
Presentation, Classification and Calculation
4.2 Analysis
of Data Test of Hypothesis
4.3 Analysis
of Data to Test of Hypothesis
4.4
Interpretation of Result
CHAPTER FIVE
5.0 SUMMARY
OF FINDINGS, CONCLUSION AND RECOMMENDATIONS
5.1 Summary
of Findings
5.2
Conclusions
5.3
Recommendations
Bibliography
Appendix
CHAPTER ONE
1.0
INTRODUCTION
1.1 OVERVIEW
OF THE STUDY
Due to
industrialization in recent years, manufacturing firms have been increasing.
They are more complex technologically and compete among each other for
survival. It can also be that high growth rate occurs among them due to some
levels of efficiency in production. The complexity and competition had been
enhanced by increasing technology, use of expertise, computerization and raw
material acquisition. There are also government economic growths cost control
to mention a few.
Among these
control measures, cost control is significantly controlled by firm, since is
managerial function which help to reduce cost in production and to again
advantage over other first in the same industry. But some questions arise how
can a firm be faced with control and management of cost decides on how many
units to be employed? At what price will the products be disposed off?
Cost volume
profit analysis is a management tool used hen the problems of CVP implications
arise in the firm, the problem includes to make or buy decisions, product
appraisal, add or drop decisions product planning and promotional mix,
distribution channels and profit planning decisions.
Cost volume
profit analysis is a valuable and reliable tool. If well applied, helps to
alleviate the enumerated problems.
The next
questions that arises is do manufacturing firms apply cost volume profit
analysis? If yes, how many CVP charts and ratios are plotted (or graphed) and
computed in order to mange and control costs while increasing profits and
market shares? How are this information relieved from appraised charts and
ratio in the light of the basic assumption? How do firms that acquired this
information used them in decision making?
1.2
STATEMENT FO THE PROBLEM
Considering
the naira and its purchasing power, the researcher founds out that
manufacturing firms are faced with heavy cost involvement during the process of
manufacturing. The incurred cost have the implications in his overall
productions which call to mind the cost problem. How can this cost problem be
alleviated?
The economy
is not the same today as it has been in the past decade. The exchange rate of
naira to foreign currencies and the price fixed for manufacturing goods and
services greatly affect the profits to be made on the part of the
manufacturers. If prices are not well fixed compared with the sale needed and
cost incurred, it will pose a problem hence.
In the past
decade, manufacturing firms had been increasing their volume of production. But
today because of inflationary trends which prompted increase in cost of
production negatively affected the volume of output. As such firms had been
forced out of business while the continuing ones find it difficult to produce
or maintain their format volume of production.
The result
is that the volume produced had reduced and reduce and this pose a volume
problem that is capacity under utilization. The next issue: How can these three
words cost; volume and profit be understood and inter mingled?
1.3
OBJECTIVE OF STUDY
The aims and
objectives of this study is to find out the reason why some firms do not use
cost volume profit analysis, in planning and control of cost, and also in
decision making.
Again, where
some firms use cost-volume profit analysis, the basic assumptions are not
implemented. It is also the objective for the study to know why some firms who
use cost volume profit analysis end up not combating cost implications
problems.
In the
objectives, also to analyze the basic assumptions of CVP analysis to know their
effect on firms especially those of the manufacturing sector.
It is by
highlighting these that a way of making recommendations to the problems will be
predicted.
1.4 RESEARCH
HYPOTHESIS
Hypothesis
one:
H0: The
application of CVP analysis graphs and ratios by manufacturers in the control
and management of costs.
Hypothesis
Two
H1: The
application of CVP analysis graphs and ratios enhance profitability,
productivity and efficiency decisions in manufacturing firms.
H0: The
applications o f CVP graphs and ratios do not enhance profitability, productivity
and efficiency decisions in manufacturing firms.
Hypothesis
Three
H0: The
application of CVP analysis is necessary in the effective control and
management of costs.
H0: The
application of CVP analysis is not necessary in the effective control and
management of costs.
1.5
SIGNIFICANCE/SCOPE OF STUDY
Due to the
inherent problems in Nigeria, the CVP analysis has been directly and indirectly
affected. It is with this in mind the researcher looks into the underlined
consideration of CVP analysis in the manufacturing firms with particular
reference to Obika Industry Limited Nkpologwu. In order to have the various
approaches of the CVP touched.
1.6
LIMITATIONS OF THE STUDY
It is due to
finance that the researcher limits himself to the use of Obika Industry Ltd. In
carrying out his project work, despite the numerous manufacturing firms all
over the country. The distance between the researcher and the case company
posed serious hitch to the smooth carrying out of this project.
The time
frame allocation to the writing of this project was so infinitesimal and hence
little time was allocated to writing this project.
1.7
DEFINITIONS OF TERMS
COST-VOLUME-PROFIT
ANALYSIS (C.V.P): This is a systematic method of examining the relationship
between changes in volumes (output) and changes in total sales revenue,
expenses and net project. As the model of these relationships, it simplifies
the real word conditions that a firm will face is it subject to a number of the
understanding assumptions, limitations and a powerful tool for decision making.
COST VOLUME
CHART (CVPC): A chart that helps in the enrichment of understanding of the
inter-relationship of all factors affecting profit especially cost behaviour
patterns over ranges of volume.
FIXED COST
(FC): The cost that fixed in total amount over a period of production, but
varies per unit of output with the level of production changes.
VARIABLE
COST (VC): The cost that directly affects production by varying the level of
production but constantly remain fixed per unit of output.
SEMI
VARIABLE COST (SVC): The cost that have both fixed and variable cost features.
It fluctuates as changes occur with relevant range but not in direct proportion
to the changes.
CONTRIBUTION
MARGIN (CM): It is the product profit of sales minus all variable costs.
BREAK-EVEN
POINT (BEP): The point of activity where total cost are equal and the firm
neither making profit nor loss.
MARGIN OF
SAFETY (MOS): This is the excess of budgeted sales over the break even sales
–volume
PROFIT/VOLUME
RATIO (PVR): Is the relationship between contribution and sales value.
GROSS PROFIT
RATIO (GPR): This is the commonest measure of profitability. The gross profit
margin measures the efficiency with which the firm produces each unit. Its
products by discounting all operating expenses.
TIME-SERIES
ANALYSIS (TSA): This approach does an evaluation of the firms operations over a
period, the purpose being to evaluate the firms performance over this specific
internal of time.
PRODUCTION
DEPARTMENT (PD): A unit in which operations are performed on the part or
product and whose costs are not further allocated.
NET PROFIT
RATIO (NPR): The net profit margin measures the percentage of sales remaining after
expenses including taxes has been deducted.
HOW TO GET THE FULL PROJECT WORK
PLEASE, print the following instructions and information if you
will like to order/buy our complete written material(s).
HOW TO RECEIVE PROJECT MATERIAL(S)
After paying the appropriate amount (#5,000) into our bank Account
below, send the following information to
08068231953 or 08168759420
(1) Your project topics
(2) Email Address
(3) Payment Name
(4) Teller Number
We will send your material(s) after we receive bank alert
BANK ACCOUNTS
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 0046579864
Bank: GTBank.
OR
Account Name: AMUTAH DANIEL CHUKWUDI
Account Number: 2023350498
Bank: UBA.
FOR MORE INFORMATION, CALL:
08068231953 or 08168759420
AFFILIATE LINKS:
myeasyproject.com.ng
easyprojectmaterials.com
easyprojectmaterials.net.ng
easyprojectsmaterials.net.ng
easyprojectsmaterial.net.ng
easyprojectmaterial.net.ng
projectmaterials.com.ng
googleprojectsng.blogspot.com
myprojectsng.blogspot.com.ng
https://projectmaterialsng.blogspot.com.ng/
Comments
Post a Comment