ABSTRACT
This research work was necessitated by the need to highlight the cost accounting and control problems inherent in the agricultural sector and Nigeria economy with particular reference is the production and animal feeds and concentrates. This is with view efficiency and the achievement of organization goals.
The stuffy was done to ascertain whether enough cost accounting information is being generated for managerial purposes by live stock feed plc, To identify the cost accounting techniques adopt by the company, investigate whether line management are deeply involved in setting standard costs of productions and whether these standards frequently reviewed to meet the requirement of current situations.
On the basis of the above, related literature was viewed to ascertain other writers view concerning cost accounting and control as it related to production of goods.
Against this background, invaluable and reliable discoveries were made. It was found out that the cost accounting techniques of standard costing is adopted by the company and there is absence of attainable standards line managers and specialists (such as accountants, engineer etc.) are not deeply involved in setting standard cost of production.
Also, standards are not reviewed in semi- annually to accommodate current circumstances just as favorable variances is not indicated.
TABLE OF CONTENT
COVER PAGE I
TITLE PAGE II
APPROVAL PAGE III
DEDICATION IV
ACKNOWLEDGEMENT V
ABSTRACT VII
TABLE OF CONTENT IX
CHAPTER ONE
10 INTRODUCTION 1
11 THE BACKGROUND 4
12 STATEMENT OF THE PROBLEM 6
13 OBJECTIVE OF THE PROBLEM 7
14 SIGNIFICANCE OF THE PROBLEM 8
15 SCOPE OF THE STUDY
AND LIMITATION 10
16 DEFINITION OF TERMS 12
CHAPTER TWO
20 LITERATURE REVIEW 14
21 MEANING AND PURPOSE OF
COST ACCOUNTING 14
22 RELEVANT COST ACCOUNTING
INFORMATION SYSTEM AND CONTROL 17
23 ELEMENT OF COST 19
24 THE CONCEPT OF COST CONTROL 25
25 COST ACCOUNTING TECHNIQUES
FOR COST CONTROL HUMAN PROBLEM OF RESPONSIBILITY ACCOUNTING AND ITS IMPLICATION ON ORGANIZATION SUCCESS 26
CHAPTER THREE
31 SUMMARY OF FINDINGS 34
32 RECOMMENDATIONS 37
33 CONCLUSION 43
BIBLIOGRAPHY 45
CHAPTER ONE
10 INTRODUCTION
The importance of the agricultural sector in Nigeria economy is generally well known Most public policy makers especially since independence in 1960, has expected the sector to satisfy the bulk, if not all, the food requirement of the country supply most of the agricultural raw material needed by the manufacturing sector, provide adequate employment and income to farmer and investors as well as earn substantial foreign exchange four the country Agriculture accounted for the total export value of Nigeria in 1962
Similarly, Olieh (1984) shared the same view, before independence said " Agricultural products formed the major component of the country's export'
The livestock sub sector is supposed to make Nigeria self- sufficient in the production of high quality in rich protein products, create employment opportunities for the army of unemployed, yield mouth-watering returns to investors to mention but a few
These remained more expectation and it led Ukpong (1993) to conclude that the live stock sub sector in Nigeria has been depressed for many years and its fortune eroded over the years Its output according to him, declined by about 182 and 44% in 1982 and 1983, r respectively how capacity utilization high coat of finished feeds Low value of the naira needed for import of raw materials and equipment have all further compound in this vital sectors
The neglect and abandonment of the sector by government for the proverbial "black Gold" (ou) has led the nation to economic stagnation, there by hungering the pace of industrialization and economic prosperity It is a welcome development that the present government has started according to the sector the recognition in its rightly deserves, though greater and more meaningful effort is needed
At the root of the problems created above, is the absence of proper cost accounting and control in that sector High cost of production with its commitant reduction of accruable profit has rendered the achievement if organizational objectives and managing efficiency vulnerable The agricultural sector especially in the area of production of finished fed has reminded largely the profitable in Nigeria over the years
To reserve this trend proper costing accounting and control measure must be adopted to ensure cost reduction and the maximization of share -holder value Proper standard costs must be instituted and variance resulting, therefore, sufficient investigated, so that corrective measures and actions will be takes The researcher, therefore intends to highlight cost accounting and control problems in most vital sector of the country with a view to the proffering valuable solutions to the myriad of problems This will enhance productivity, increase profitability and ensure managerial efficiency in the employment of resources as well as restore the livestock sector to the part of growth A critical evaluation of the cost control measures obtainable at live stock feeds PLC Will be used as a case study, since the company has a great role to play in the production of animal feeds and concentrates in Nigeria
11 BACKGROUND OF STUDY
Livestock feeds plc was incorporated in 1953 it was formally a subsidiary of Afizer incorporation until ADSET LTS acquired the majority share holding of 60% shares previously hold by the former It was a management buyout arrangement The company's principle activity is the manufacture and marketing of animal feeds and concentrates
In other words, the company is basically engaged in poultry farm business, production of finished feeds for birds
The major rations produced are chick mash, grower mash, layer, starter, and finisher and the materials used for their production are brought from the open market at the ruling market price This usually entails huge carriage and handling cost as well as the unavailability of materials, which sometimes crippled operation
The company only resumed decided payment in 1993 the company has four plants at Aba, Benin, Lagos and Kaduna Over the years, the company has been facing the problem of under-capacity utilization according to sources within the organization which they are presently shining to reverse so as to enable the company assume its rightful position as the first name in feeds productions in Nigeria
A study of this nature is important considering the place of the company in the entire agricultural sector This is to highlight the likely cost accounting and control problems inherent in the company, so that solution could be preferred to deal with them Definitely the absence of quality and affordable feeds for livestock will inhabit of the growth of that essential sector, hence the need for detailed examination of the company
12 STATEMENT OF THE PROBLEM
The problem of under-capacity utilization in the agricultural sector especially at its relates to the production of animal feeds in Nigeria in indisputable The deduction to be made from wastage in the production process occur and the cost accounting and control techniques adopted in the agricultural sector was not totally effective Since there is idle capacity, the cost of production overhead and subsequently of the products cost are unnecessarily increased and managerial efficiency hammered
The recurring decimal in this sector becomes that of low productivity and production of low quality feeds lows employee mortal and managerial inefficiency Against this background achievement of organization goals and profitability becomes even more difficult This is the more reason why a study of this nature is important, so as to point the way forward
13 OBJECTIVE OF THE STUDY
The cost accounting and control problems inherent in the production of finished feeds of livestock feeds plc With a view to preferring valuable solutions to the myriad of problems This will enable the sector to return to the part of growth and profitability based on the above, the following objectives are to be pursed
1 To ascertain whether enough cost accounting information is generated by livestock feeds Plc
2 To identify the cost control techniques adopted n the company
3 To investigate whether line managers are involved in setting standard cost of production
4 To ascertain whether standard are frequently reviewed by the company
5 To profit valuable solutions, based on the findings to the myriad of cost accounting and control, problem in the production of animal feeds which will enhance mag
14 SIGNIFICANCE OF THE STUDY
This nature cannot be over emphasized Infact, one scarcely needs to state the outcome of the research would be of immense benefits to the management and staff of the company, the shareholder, the government and the economy, generally with particular emphasis on the agricultural sector The continued survival and growth of any organization depends exclusively on its ability to generate profit or at least break-even
This in turn hinders on its ability to minimize cost and maximize returns for its shareholders and other stockholders
Since this study intends to identify and proffer solutions to the various cost control problems inherent in live stock feeds plc, the benefit to the sector, which it belongs, could be imagined that described
Furthermore, government and economy will benefit through increase income in from of taxes as well as provision of raw materials needed for speedy industrialization More foreign exchange will accrue to the nations coffers and job opportunities will be created for the army of unemployment graduates
There should be no doubt as to the ability of the study to bring about increased managerial efficiency in the employment of resources as well as its role in creating, and enabling environment for the achievement of organization goals Even other sector of the economy can make valuable deductions that will enhance control and spur them to growth and profitability
15 THE SCOPE AND LIMITATIONS OF THE STUDY
The study will be centered on cost control problems inherent in the agricultural sector of the Nigeria economy with particular reference to the production of finished feeds for livestock The researcher does not intend to cover such areas as farming and animal rearing
Since standard costing techniques is adopted at livestock feeds plc, effort will be made to fully explore how it is applied in that company with a view to drawing conclusion as to the faithful application or other wise as a control tool An attempt will be made to show how variances are accounted for and whether they are properly investigated for corrective actions to be initiated
Similarly responsibility accounting will be examined, so as to see it relevance in ensuring managerial efficiently and the achievement of organizational objective The aim is highlight the problems of cost control in agric -business with a view to proffering valuable options The native is unique and several limiting factors will ordinarily arise As already explained in livestock feeds plc have plants spread across the country could be visited because of the Northern part of the country could be visited because of the incessant there This is considered in a limitation, since the death of the researcher could lead to the death of the research
A particular note is the issue of time, the running of crash programmes in the university has become a recurring decimal due to frequent strike actions by lectures and its implications on the research are obvious It should also be noted that money plays a great role in any research work and this one has no exception The absence of finance could not allow for the issue of more than one firm as a case study which is relevant given to the place if agriculture in the country
Also lack of willingness on the part of some individuals within the organization to provide information on some operations of the company inhibited the progress of the research, through his was overcome to a great extent by the research through persuasion
However, the presence of these difficulties, the researcher was able to do great job, which can be validity relied on by any interested party
16 DEFINITION OF TERMS
1 Centralized budgeting: This means a budgeting system whereby the budgets are prepared by the head office and gives to the plants of divisions within he organization to implement with little participation from units
2 Decentralized Budgeting: This is a process of budgeting whereby the various units are allowed fully participation as regards in budgeting
3 System: This is a recognizable whole made of components parts (department) that works together to achieve a common goal
4 Agriculture: This is taken to mean of the production feeds for birds and concentrates
5 Animal feeds: This means the various of productions produced by the company such as finisher started and grower mash It is also referred to finished feeds
6 Marginal costing: This is a costing method whereby only variable manufacturing costs are allocated to produces and included in the stock valuation