ANALYSIS OF BUSINESS
OBJECTIVE AND THEIR ACCOMPLISHMENT THROUGH EFFECTIVE COST CONTROL
(A CASE STUDY OF LAKE
CONCRETE INDUSTRIES LIMITED, ENUGU
STATE)
ABSTRACT
This study is centered on the
analysis of business objective and their accomplishment through effective cost
control in lake concerted industry-limited Enugu. There are lots of problem that face
the industry, some of which are shortage of raw materials, excessive demand,
ineffective stock planning and inefficient stock management.
The study therefore embarked on how the industry should form
a strong stock management policy. Thereby forming a stock management committee
that will monitor the implementation of the policy.
Also in this study, proper method of
determining the maximum stock level was worked out that is the use of
probability and technique. In the same val-soft were was procured to help in
checking over-stocking and under stocking.
In this research work, questionnaires were used as the
research work, question. Data were also collected through personal interview.
The uses of chi-square and sample table were used to know how effective and reliable
are the observed facts. Based on the objectives of this study, researcher come
up with findings as it effects the effective cost control in lake concrete
industry limited Enugu.
It found out that there are low national factors and this made the workers to
be relevant to put in their best at
work.
On this effect, the researcher come to conclude that training
and development will contribute immensely to effective performance of the
workers.
Therefore, the research finally recommends that the management
of the industry should endeavor of staff to training and development to enhance
proper technical know how of the job as will give opportunity to workers to
influence decision effecting them.
TABLE
OF CONTENT
Title Page ii
Approval
Page iii
Dedication
iv
Acknowledgement v
Abstract vi
Table of
Contents viii
CHAPTER ONE:
Introduction 1
1.1
Background of the Study 1
1.2
Statement of the Study 4
1.3
Purpose of the Study 4
1.4
Scope of the Study 5
1.5
Research Question 6
1.6
Significance of the Study 7
1.7
Definition of Terms 8
Reference 10
CHAPTER TWO:
Review of Related Literature 11
2.1
Overview of Business 11
2.2
The Objective of Business 12
2.3
Overview of Cost Control 16
2.4
The Role of Cost Control in
Business 33
2.5
Relationship to the Study 35
Reference 37
CHAPTER THREE:
Research Design and Methodology
39
3.1
Research Design 39
3.2
Area of the Study 39
3.3
Population of the Study 40
3.4
Sample and Sampling Procedure
/Technique 40
3.5
Instrument for Data Collection 42
3.6
Validation of the Instrument 43
3.7
Reliability of the Instrument 43
3.8
Method of Data Collection 43
3.9
Method of Data Analysis 45
Reference 46
CHAPTER
FOUR:
Presentation and Analysis 47
4.1
Presentation of Data analysis of
Data 47
4.2
Testing of hypothesis 63
4.3
Summary of result 73
CHAPTER FIVE:
Discussion, Recommendation and
Conclusions 75
5.1
Discussion, Results /Finding 75
5.2
Conclusion 76
5.3
Implication of Research Findings 77
5.4
Recommendation 77
5.5
Limitation of the study 78
5.6
Suggestion for the research 79
Bibliography 80
CHAPTER
ONE
INTRODUCTION
1.1
BACKGROUND OF THE STUDY
The pursuit of an objective and the accomplishment is the
characterizes and every organization and this objective and accomplishment
exist in dimensions. Every business organization whether sole trade (one man
business) partnership, company or comporting therefore most have objectives and
expected accomplishment. The primary objective of every business organization
in a capitalist or mix-economy is to make profit, and meet their
accomplishment.
Profit is described as the excess of total revenue over total
cost during a specific period of time. For firms (Mostly competitive) to make
profit, they most have control over the cost of their production and services.
In many business organizations some supervisors, always from
and query why accountants usually scrutinize their expense and other cost they
present for payments, when the money does not come from the accountants
pockets. Accountants scrutinize claims, voucher etc in order to satisfy
themselves that a particular item of cost is reasonably necessary and wholly
for the operations of the enterprise. Just like any one of us as individuals,
we try to satisfy all our necessary requirements without throwing ourselves
into financial mess before the inflow of another income, the scammers why
individual requirement applies to partners in partnership, companies etc when
an accountant queries cost incurred in ones department or cost center, all he
is trying to do is to ensure that reasonable cost are being incurred for the
level of the enterprises’ performance.
The researcher believe that each one of us manages cost in
our respective homes and by so doing we are exercising the function of a
financial manager through at domestic levels. If one gives his wife a
reasonable monthly allowance to run the home and two weeks later, she asks for
more money because she has finished the amount given to her, certainly the
husband would from at her for not controlling her spending habits. The common
excuse house wives give is that things are expensive, but then a cost anxious husband
before giving additional money would ask the wife whether she has tried
alterative market or alterative food stuffs. In the some manner, Accountants
Managers enterprise finds. While in the process they are not unnecessarily
rigid but ensure that limited overall objectives of the organization are
achieved.
Cost control can therefore be described as the prevention of
within the existing environment in an organization. The main methods employed
in controlling cost are budgetary control, cost reduction technique and value
analysis. It is the intention of the project researcher to emphasize more on
cost reduction. Although both budgetary control and cost reduction go hand in
hand because it is difficult to demarcate where cost control? And budgetary control
ends both terms are concerned with improving efficiency and increased
profitability. However, it is pertinent to note that effective and reasonable
cost reductions for present output serves as standard for future production.
The researcher has decided to use LAKE CONCRETE INDUSTRIES
LIMITED ENUGU as a case study, the establishment has been operating at loss for
over five (5) years now which means that the objective of setting up the
business is been defected. The researcher would then find out whether cost were
substantially responsible for the loss. This will entail the analysis of cost
incurred in its products so as to find out the area of weakness and hen suggest
ways at improvement for the purpose of internment of the enterprise objective
and their accomplishment.
1.2 STATEMENT OF THE PROBLEMS
This project study titled “analysis of
business objectives and their accomplishment through effective cost control”
intends to investigate the cause of the persistent loss in business operations
of lake concrete industries limited.
The company has been experiencing high
rate of labour turnover, since it could not pay it workers regularly. There is
also great number of debtors to the company and the situation has resulted to
shortage of operating capital, so the researcher wants to find out the exact
causes of the problems and patter suggestion to them.
1.3
PURPOSE OF THE STUDY
In
simple and direct terms this research work has purpose / objectives which are
as follows
(a) To have
on in-depth study on business objective and their accomplishment through cost
control
(b)
To investigate the causes or under mining factors responsible for the
persistent loss being encountered by lake concrete industry Ltd Enugu.
(b) The study aimed to emphasis through
analysis the importance of effective cost control in lake concrete industry ltd
and all other manufacturing industries.
(c) To
highlight how effective cost control can help lake concrete industry in
resizing and accomplishing her set objective or goals.
(d) The
study also aimed at proposing some ways of enabling manufacturing industries,
lake concrete industry invasive to attain and achieve their gods do as to be in
the business.
1.4 SCOPE OF THE STUDY
The
scope of this study is apparently carried with lake concrete industry limited Enugu.
The
study dealt with the ability of the company lake concrete limited to achieve
the set objective through effective cost control.
It
covers area of profit mating, cost and budgetary limited Enugu.
1.5
RESEARCH QUESTIONS
In other to have a sound basis for this research project, the
researcher considers it imperative to build up a hypothesis.
Lake concrete
industries limited which is a case study at the researcher has been incurring
loss for over three years now. The researcher is considering that there should
be relationship between cost control and loss, whether cost has been
responsible for the loss or not.
To this effect the researcher has to design a research
question which will be administered in form of questionnaire to staff and
management of lake concrete industries limited, to ascertain if cost control is
responsible for the industries’ loss over these years.
These questions include some of the following:
1.
What is the major problem facing
the industry?
2.
Does the industry has specialist who does her
purchase for her?
3.
What strategy does the industry adopt to the
coerces of taxing the product to the market for sole?
4.
Is the company presently achieving
its objectives?
5.
How effective is the budget control
of the firm?
6.
Are the firms objectives clearly
take to promote to the workers?
7.
What measure does the firm take to
promote staff’s morals and boast their productivity in the industry?
8.
How often does the firm accomplish
their objectives?
9.
Does the industry acidly engage in
cost control in their operation?
1.6
SIGNIFICANCE OF THE STUDY
The study would help the lake
concrete industries limited in strengthening of its plan for it’s achievement
in particular and other organization in general.
The study will also may choose to go
further in the study.
Under
this study emphasis is held towards the practical acquisition skills, knowledge
and its application there by complementing the theoretical aspect of the
student’s work. This work no doubt will lead to an increase in the subsequently
since the primary object is to make profit, their accomplishment of this gods
will also lead to expansion of any business enterprise and also the enhancement
of the employment base.
Government expensive which is the
greatest in nation building is dependent on government revenue. The project is
invaluable to the government for the taxation on the profit that can now be
generated by lake concrete in particular.
1.7 DEFINITION OF TERMS
BUDGETARY
OF CONTROL: The establishment of budgets relating the
responsibilities of a policy and continues comparison of cuticle with budgeted
results, either to score by individual action the objective of that policy or
to provide a bases for its revision.
CARRYING
COST: These cost that arises with large inventories and the
cost associated with it are the cost of capital tied up in inventory, storage
cost, insurance cost, property taxes and deprecation and obsolescence.
COST
CENTER:
A cost center is convenient intermediate point usually
physical or geographical entity to which cost can be charge.