ABSTRACT
The topic of this research work is the effect of costing
methods on price determination in a manufacturing company (A case study of
Unilever Nigeria, Plc).
Manufacturing costing methods are accounting techniques that
are used to help understand the value of inputs and outputs in a production
process. By tracking and categorizing this information according to a rigorous
accounting system, corporate management can determine with a high degree of
accuracy the cost per unit of production and other key performance indicators.
Management needs this information in order to make informed
decisions about production levels, future investment, competitive strategy and
most especially price determination. Such information is primarily necessary
for internal use or managerial accounting.
Chapter one deals with its introduction, background,
objectives, significance, scope and limitations of the study, it also deals
with statement of problems and hypothesis and the relevant research questions.
Chapter two deals with the literature review where the various types of costing
methods and its effects on pricing are discussed. Chapter three deals with the
research design and methodology in which the population and sample sizes were
determined. Chapter four deals with the presentation and analysis of data, two
hypothesis were tested and results interpreted. It was concluded that the use
of costing methods will help to determine the profitability of a manufacturing
firm and that costing technique will enhance a manager’s understanding on
product cost. Chapter five deals with summary, conclusion and recommendations.
TABLE OF CONTENTS
Title page- – –
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-i
Approval page- – –
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-ii
Dedication-
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Acknowledgment-
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– -iv
Abstract- – –
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– -vi
Table of contents-
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– -viii
Chapter one
Introduction-
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– -1
Background of the study-
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Statement of the problem- – –
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Objectives of the study-
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-9
Research questions-
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-10
Statement of hypothesis-
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Significance of the study-
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Scope of the study-
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-14
Limitation of the study-
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Definition of terms.-
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-16
Chapter two
Literature review- –
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2.1 Introduction-
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– -19
2.2 Costing defined –
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-24
2.3 Purpose of costing methods –
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-28
2.4 The role of cost accountant –
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-29
2.5 Different types of costing methods- –
– – -32
2.6 Process costing- introduction and principles- –
-43
2.7 Process costing-work in progress, joint products and
by-products – – –
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-50
2.8 joint product
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– -55
2.9 the effects of transfer price on costing method – -61
Chapter three
Research design and methodology- –
– – -66
Introduction-
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– -66
Research design-
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-67
Sources/methods of
data collection- – –
-67
Population and sample size- –
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-69
Sampling technique-
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– – -70
Validity and reliability of measuring instrument- -71
Method of data analysis –
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Questionnaire
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Chapter four
Presentation and analysis of data- –
– – -78
Introduction-
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– -78
Presentation of data-
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Analysis of data-
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-79
Test of hypothesis-
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-91
Interpretation of results-
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Chapter five
Summary, conclusion and recommendations- –
-95
Introduction-
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– -95
Summary of findings- –
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– -95
Conclusion-
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– -97
Recommendations-
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-97
References-
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Appendix (ces)- –
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-102
CHAPTER ONE
INTRODUCTION
A costing method is a method of costing which is designed to
suit the goods that are processed or manufactured or the way that services are
provided. It follows therefore that each firm will have a costing method which
has unique features.
Nevertheless,
there will be recognizable common features of the costing system of the firm
who are broadly in the same line of business.
Conversely,
firms employing substantially different manufacturing methods, for example, a
food processing and jobbing engineering factory will have distinctly different
costing methods as will the huge variety of services organization. It must be
clearly understood that whatever costing method is employed, the basic costing
principles relating to analysis, allocating and apportionment will be used.
CATEGORIES OF COSTING METHODS
There are two broad categories of product costing methods;
namely:
Specific order costing and
Continuous operation or process costing.
SPECIFIC ORDER COSTING
This can be defined as the basic costing method applicable
where the work consists of separate contracts, jobs or batchs.
In most cases, the job or contract is the cost unit and
frequently but not always, the jobs or contracts are different from each other.
The main sub-divisions of specific order costing are:
Job costing
Control costing
Batch costing