COST CONTROL AND COST REDUCTION OF THE NIGERIA BOTTLING COMPANY PLC


COST CONTROL AND COST REDUCTION OF THE NIGERIA BOTTLING COMPANY PLC  

TABLE OF CONTENTS

Certification i

Dedication ii

Acknowledgement iii

Table of Content v

CHAPTER ONE

1.1 Introduction 1

1.2 Statement of the Problem 2

1.3 Historical Background of the Study 3

1.4 Research Questions 5

1.5 Objectives of the Study 6

1.6 Research Hypothesis 6

1.7 Significance of the Study 7

1.8 Scope of the Study 8

1.9 Definition of Terms 8 

1.10 Plan of the Study 10

CHAPTER TWO

 LITERATURE REVIEW

2.1 Meaning of Cost Control 12

2.2 Cost Control Techniques 15

2.2.1 Cost Planning 15

2.2.2 Cost Reduction 17

2.2.3 Budget and Budgetary Control 20

2.3 Effect of Cost Control 21

2.3.1 Direct Cost Control 22

2.3.2 Overhead Cost Control 24

2.4 Conclusion 25

CHAPTER THREE

3.1 Research Methodology 26

3.2 Sources of Data 26

3.3 Population of the Study 27

3.4 Sampling Method 28

3.5 Method of Data Convention 28

CHAPTER FOUR

Data Presentation and Analysis

4.1 Data presentation 29

4.2 Data Analysis According to Test of Hypothesis 39

4.3 Interpretation 42

CHAPTER FIVE 

Summary of Findings, Conclusion of Recommendation

5.1 Summary of findings 43

5.2 Conclusion 45

5.3 Recommendations 46

      References 48

  CHAPTER ONE

1.1 INTRODUCTION

This industry developed in Nigeria and West Africa starts as a result of necessities by the colonial masters to process agricultural products obtained in their various territory.

Most of the industries were agro-based and inter minerals resource. Other industries later spring up as a result of one or the other, with the introduction or the co-operation from the organization are directed towards minimizing cost to attain maximum profit.

Therefore, control is not possible without planning and planning without a complementary control system is pointless.

Cost control is concerned with watching the performance of an organization and the control process include the steps of establishing standards and taking measures that such standards are formed with.

Cost control is very essential for improving the efficiency with which to conduct an organization to maximize profit such resultant improvement can be at immense benefit to the consumers who enjoy lower price, shareholders who earn higher returns, employee receive higher wages and government collect more taxes.

1.2 STATEMENT OF THE PROBLEM

Statement and recruitment is a step on management development, which help fundamentally to find and attract potential employees who it successful, eventually full vacant positions.

In management, professionalism developed states of selection  and recruitments which employees in conjunction with other tools of personnel and maintenance of efficient work force and indeed the utilization and the conservation human resources.

Infact a firm working like abundant evidence clearly prove that these tests, all things being equal are creditable predictions of employees job performance.

However, the Nigeria societal immortality and political  influence have created discrepancies in selection procedures through such vies as favoritism and nepotism. These are problems arising from vague description of job by these personnel management, because of these problems, the need for a close up examination of the whole selection process or labour turn-over in Nigeria bottling company plc, become inevitable.

1.3 HISTORICAL BACKGROUND OF THE NIGERIA BOTTLING COMPANY

The Nigeria bottling company limited, the authority companies making up the group of companies. The A.G leventies group of companies has immensely contributed to the socio economic development of Nigeria. It’s headquarters is at Iddo, lagos states. The history of coca-cola company limited can be traced briefly to the history of coca –cola company of the united states of America (U.S.A) which is very old organization.

Coca-cola as a drink was first brewed and sold at soda fountain in Atlanta Georgia, USA in 1904.

In 1806, coca-cola was first made by Dr. John stylla periberton, a pharmacist and the name coca-cola was given by frank M. Rohmson who was Dr peribetor’s partner and book keeper. He also designed the flowing script that distinguishes the famous trade mark. The drink was made know to people through Dr, Perabeton advertising and marketing activities.

According to history, coca-cola first came to Nigeria 1953 when Nigeria bottling company set up its first plant in lagos, precisely at oyingbo but later move to apapa.

It was to be the beginning of the existing story of growth and development to the company’s establishment.

1.4 RESEARCH QUESTIONS

In order to get information from respondents, the following question were formulated..

1. What are the various types of cost-control and the extent of cost-control in a business organization?

2. In what extent can cost-control improve or enhance business organization?

3. What are the roles of cost-control in a business organization?

4. What constitute the cost – control and profitability?

5. What are the impacts of cost – control in the profitability of a business organization?

1.5 OBJECTIVES OF THE STUDY

The objectives of the study for this research work are as follows:

1. To examine the various types of cost-control and also the extent of cost control in a business organization.

2.  To know how cost-control has been an improve to business organization.

3.  To discuss the roles of cost –control in a business organization.

4.  To examine cost –control and profitability

5.  To expatiate the impact of effective cost –control in the profitability of a business    organization.

1.6 RESEARCH HYPOTHESIS

One of the characteristics of this study is to enumerate some fundamental hypothesis statement revolving round the problem of the study. Therefore, some hypothesis has been formulated to make clarification of the problem in effect of cost-control for this reason, the following question are tested.

1. Does cost –control have any effect on the profitability of a business organization?.

2. Does cost-control have any effect on business organization?

The general hypothesis that will be tested in the cause of the research is as follows:

HO: Effective in cost –control will not be positive impaction on business organization

HI: Effective in cost –control will have positive impaction on business organization

1.7   SIGNIFICANCE OF THE STUDY

One of the important of the study will be to extend the knowledge on the modes of operation to extend the knowledge on the modes of operation of production companies in Nigeria with emphasis on cost- control in Nigeria bottling company plc. The relationship between its function and mode of operation. This will suggest remedies to problems militating against Nigeria bottling company plc, Ilorin planton cost-control activities.

1.8 SCOPE OF THE STUDY

The scope of this research work will be focused on cost-control and cost reduction of the Nigeria bottling company plc, Ilorin plant in the area of production process to maximize the profit of the company from the year 1990 till date

The limitation of this research work may be limited by sufficient finance, lack of enough time and un-cooperative attitude of staff.

1.9 DEFINATION OF KEY TERMS

1. COST: this is the price paid or amount of money needed for something.

2. CONTROL: this means management restriction and regulation of something to achieve a standard set up.

3. BUDGET: a financial or quantitative statement prepared and approved. Prior to a defined period of time as regards the policy to be pursued during that period, could be income or expenditure.

4. COST CONTROL: this refers to the guidance and regulation of operating cost by management action. It is also refers to as limitation or contiments of cost.

5. BUDGET CONTROL: this is the establishment of budget relating the responsibility or the executive to the requirement of the budget or policy and the periodic review or comparison of the actual result with the budget performance, their to secure an approval for individual action or as to remedial course of action

6. COST ACCOUNTING: these used accounting procedures to classify and record expenditure so as to allow accumulation of cost information in order to be able to measure managerial efficiency.

1.10 PLAN OF THE STUDY

As mentioned earlier, the study will focus on the effect of cost control in the profitability of a business organization.

Chapter one of the study contains  introduction, statement of the problem, research questions, objectives of the study, research hypothesis, significance of the study, scope of the study and definition of key terms

Chapter two of the study deals with a literature review of the study where the theoretical aspects such as the historical elevation of cost control meaning, cost –control techniques, cost planning, cost production, budget and budgetary control, the effects of the cost control in a business organization direct control and over tread cost control.

Chapter three of this research work deals with the exposition of historical background of the study and methodology which deals with the methods and sources of data collection and analysis.

Chapter four of the study consists of the data presentation and data analysis

Chapter five contains the summary of the findings and the case study, recommendations and conclusion of the researcher on the topic. The list of contracted materials and text book with their various author are also stated, therein like the bibliography reference.

CHAPTER TWO

LITERATURE REVIEW

2.1 MEANING OF COST CONTROL

Kam (2011) defined cost as the sacrifice incurred in economic activities that which is given up or figure to consume, to save, to exchange, to produce etc.

He submits that cost is significant primarily because its approximated for value of data of acquisition. He conclude that cost is an indicative of value received at the time of exchange over  a period of time, if there is evidence that value is less than cost of materially greater than cost adjust should be made.

Mubarak (2007) defined cost as the total amount of expenditure incurred or to be incurred in the process of manufacturing a product of rendering service.

Merys, Watter Bank Merys, Robbert (2011) stated that knowing the cost of a particular product is vital to the efficient management of a business. He said cost  accounting is being concerned with determing and controlling the cost in particular product or processes.

Nerced Matthew (2012) said cost are simply in the form of expenditure to assist o. increase of liability. Unexpired cost are cost of asset, expired cost are expenses, he said accomplishment of an entity measure in term of  revenue and expenses are sacrifice that must be made in that they help to generate revenue.

Helmes (2002) said that primary aim of any commercial is to make profit but, profit does not arise automatically in the business that is excess if any of selling prices over cost and as I practices selling prices is usually influenced by competition of rival concern or products. It still follows that any success he may have in selling his goods or services profitability is likely to depend upon his ability to plan for and to control his cost upon the extent to which he can keep below the selling price imposed upon him, by competition

Kalpan. S (2011) defined cost control as the regulation by the executive action of the operating an undertaking particularly where such action is guided by cost planning and according. It covers the control of material usage and materials price wages cost, separating the effects of efficiency from rated of pay of maintenance and service and of all the item of indirect expenditure.

John sizer (2004) defined cost control as guidance yardstick commonly used in this comparison in the cost record of a proportion of sales of various products does not change substantially from period to periods there is a risk of an indifferent current records seeming to be good only.

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COST CONTROL AND COST REDUCTION OF THE NIGERIA BOTTLING COMPANY PLC



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