EFFECTS OF STANDARD COSTING ON THE PROFITABILITY OF MANUFACTURING COMPANIES (A CASE STUDY OF AMA BREWERY)
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EFFECTS OF STANDARD COSTING ON THE
PROFITABILITY OF MANUFACTURING COMPANIES (A CASE STUDY OF AMA BREWERY)
ABSTRACT
The
topic of this research is effects of standard costing on the profitability of a
manufacturing company. The purpose of this study was to discover if the
application of standard costing techniques have any effect on profitability, to
explore the relationship between standard costing and the profitability of manufacturing
companies and also to determine whether standard costing techniques and
principles are being adopted and practiced in Nigerian manufacturing companies
(Nigerian breweries, Ama Eke, Udi local government of Enugu state). The design
of this study is descriptive survey method and the study was conducted at
Nigerian breweries, Ama which is the case study of this research work. The
instrument of data collection was analyzed using the chi-square method. The
researcher discovered the following as her data findings that proper accounting
records are kept and are significantly necessary in the management of the
company. That the company employs standard costing in costing their product and
decisions are made with the standard costing information obtained in the
company. That accounting reports are prepared and presented to the company’s
management and that actions are taken promptly on the information given in the
report. That effective application of standard costing has effect on the
profitability of the company. That the company benefit in a significant way
through the use of standard costing especially in the improvement of profit.
The researcher came to a conclusion that standard costing is widely used in
Nigerian manufacturing companies and that standard costing enhances adequate
planning, control and decision making processes in the company. That standard
costing aids manufacturing companies in the elimination of unprofitable
products, provision of costing information and cost control.
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