Role of Management Accountant to Cost Control and Profit Performance : Current School News

The Role of Management Accountant to Cost Control and Profit Performance in an Organization

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The Role of Management Accountant to Cost Control and Profit Performance in an Organization.

ABSTRACT

Accountants have been bestowed with the role of providing information to the management regarding the affairs of the organization in particular and to the stakeholders in general. Internally, in manufacturing organization, management has always relied on the management accountant for cost evaluation and performance efficiencies of cost element.

This role of management accountant to the management has been in doubt because of incessant increase in the cost elements of goods manufactured in Nigeria which in cause has resulted in constant increase in the price of goods.

The aim of this research study is to evaluate the role of management accountant to cost control and profit performance in an organization. a quasi-experimental research design was adopted for this research study and the sample size was selected using the Taro Yamane sampling technique.

Primary and secondary sources of data were used in collecting information which was analyzed using simple percentages. The hypothesis was tested using chi- square statistical method at 0.05 level of significance for validity and decision making.

The findings from the analysis of the research study depicts that organizational strategic managers should rely on management accountant information for decision making. Management of any manufacturing company cannot make profitable decision without quality information.

The researcher can confidently conclude based on the findings that the availability of skilled, knowledgeable and informative management accountant in an organizational profit performance promotes productivity.

Therefore, this research work recommends that management accountants should provide information on time so as to hasten up in making vital decision because undue delay in decision making will definitely undermine the firms‟ goal of profit maximization.

Also, it recommends that adequate exposure should be given to management accountants through training programmes, appraisal and evaluation of seminars in order to acquaint them with the new technologies in vogue and keep pace with new knowledge.

TABLE OF CONTENTS

Title page i
Certification Page ii
Dedication iii
Acknowledgement iv
Abstract v
Table of contents vi

CHAPTER ONE: INTRODUCTION

1.1 Background of the study 1
1.2 Statement of the study 2
1.3 Objectives of the study 3
1.4 Research Question 4
1.5 Formulation of hypotheses 4
1.6 Significance of the study 5
1.7 Scope of the study 6
1.8 Limitations of the study 6
1.9 Definition of terms 7

CHAPTER TWO

2.1 Definition of profit performance. 9
2.2 The concept of profit performance. 10
2.3 Functions of Management Accountants in relation to profit making in an
organization. 12
2.4 Basic tools employed by Management Accountants in
Profit maximization. 14
2.41 Standard Costing 14
2.42 Marginal Costing 20
2.43 Budgeting and Variance analysis 22
2.44 Cost Volume Profit Analysis 28
2.5 The Concept of Cost in Profit Maximization 29
2.6 Ways of Regulating Cost in a Manufacturing Company. 31

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research Design 36
3.2 Sources of Data 37
3.3 Area of study 38
3.4 Population of Study 38
3.5 Determination of Sample Size 38
3.6 Reliability Test 40
3.7 Validity Test 41
3.8 Method of Data Analysis 41

CHAPTER FOUR: PRESENTATION AND ANALYSIS OF DATA

4.1 Presentation of Data 43
4.2 Analysis of Data 43
4.3 Testing of Hypotheses 60

CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATIONS.

5.1 Introduction 67
5.2 Summary of findings 67
5.3 conclusion 69
5.4 Recommendations 70
Bibliography 72
Appendices 74

INTRODUCTION

Prices of goods and services are gradually increasing day by day, and due to the fact that the sole aim of a businessman, producer or manufacturer is to make profit they end up making use of low quality materials for production so as to reduce cost of production and maximize profit.

Moreover, with the increase of competitors around, most of the producers have thought it wise to manufacture or package a quality product and also enhance their profit level.

This elevated the interest of the researcher to bring to light of how this goal can be achieved through intensive study of the role of management accountants to cost control and profit performance in an organization.

Apart from cooperate scandals; there has been anosmatic pressure for better profit maximization as the business environment became more volatile, prices of products increasing at an alarming rate, and the production of low quality products.

In the past management accountants operation is strictly on workers capacity usually separated from the managers for whom they provided reports and information.

But in this present period, management accountant now serve as internal business consultants. Working together in cross functional teams with managers from all sectors of the organization.

BIBLIOGRAPHY

Brown, D. (2006). The future of corporate governance. UK Management Auditing Journal, Vol. 12.

Ezeamama, M. C. (2002). Fundamental of financial management (A practical guide). Enugu: Ema Press Publishing Ltd.

Frank, A., & Bennard, H. (1981). Competence and power in managerial decision making. Englewood Cliffs, NJ: Prentice Hall.

Garrison, R., et al. (2005). Management accounting. (10th ed.). New York: McGraw-Hill Inc.

Hilton, R. W. (2005). Managerial accounting. New York: McGraw-Hill Inc. earnings forecast.

Karamanuo, I., & Vafeas, N. (2005). The association between corporate boards, audit committees and management. International Journal of Business and Management, Vol. 17.

Koontz, H., & Weihrich, H. (2005). Essentials of management. (5th ed.). New York: McGraw-Hill Inc.

Lambart, C., & Sponem, S. (2005). Corporate governance and profit manipulation. Journal of Accounting and Finance, Vol. 25.

Lucey, T. (1998). Management Accounting. (4th ed.). London: Ashfore Colour Publishers.

Lucey, T. (2007). Images of organizations. Beverly Hills: G.A Sage Publication Ltd.

Malamo, M. (1996). Management accounting with application of qualitative techniques .Lagos: Chinedu Publishers Ltd.

Nworji, I. D. (2000). Special emphasis on management accounting. Owerri: Learners Publishers.

Rensis, L. (1961). New pattern of management. New York: McGraw-Hill Inc

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