TABLE OF CONTENTS
Title page = = = = = = = = ii
Approval page = = = = = = = iii
Acknowledgement = = = = = = = iv
Table of content = = = = = = = v
Abstract = = = = = = = = vi
CHAPTER 1
Background of the study = = = = = = 1
Statement of the study = = = = = = 6
Objective of the study = = = = = = 8
Scope of the study = = = = = = 9
Significance of the study = = = = = = 9
Research question = = = = = = 10
CHAPTER 2: REVIEW OF RELATED LITERATURE
The concept of cost = = = = = = = 12
The concept of cost reduction = = = = = 14
Function of the management accountant
in relation to profit maximization = = = = = 16
Period budget = = = = = = = = 35
Ways of regulating cost in a manufacturing company = = = 41
Other aspect of cost reduction = = = = = 45
CHAPTER 3: RESEARCH METHODOLOGY
Area of study = = = = = = = = 47
Research design = = = = = = = 47
Data sources and collection = = = = = =48
Population of the study = = = = = = =49
Sampling procedure and sample size = = = = =50
Method of data analysis = = = = = = =51
Problems and limitation of data = = = = = 52
Validation of instrument = = = = = = 53
CHAPTER 4: DATA ANALYSIS AND TECHNIQUES
Testing of hypothesis = = = = = = 55
CHAPTER 5: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION.
Summary of findings = = = = = = 66
Conclusion = = = = = = = 69
Recommendation = = = = = = = 70
Bibliography
Appendix
Questionnaire
ABSTRACT
This research work investigate the role of the management accountant in profit maximization. The research was poised in finding out how management accountant play a vital role in profit maximization and thus ascertained equally how the knowledge of management accountant brings about a positive impact in the affairs of a company. A population variable of 133 employees of banks and a sample size of 100 were highly utilized. Four hypothesis were formulated and tested with Z-test method analysis using the four liket type. Among other things, one of the major findings was observed that management accounting techniques has a salutary impact on profit maximization and the researcher concluded that the management accountant through the provision of specialized information gathered from his knowledge as a professional plays a prominent role in the maximization of the profit of manufacturing outfit. Finally, the researcher therefore recommended that since business decision today guarantee the continuous existence of the business and the effectiveness of the decision itself is a function of the information used in reaching it, every manufacturing outfit should employ the services of a qualified management accountant.
CHAPTER 1
Background of the study
Modern business organization operates in an environment that is considerably complex. Since the 1970’s managers have had to cope with rising interest rates materials shortage crises inflation and environment regulations to mention but a few and the traditional method of analyzing problems and making decision have been found incapable of effectively handling this increasing complexities due to change that exist within the environment. It becomes an important characteristics of a good management to be able to evaluate the past changes to react to current changes and to be able to predict the future changes. In this direction, management needs information continually which will helping the planning and controlling of the operation of the organization.
The need for accountability has given rise to cost accounting system, which provides information that is useful to management for internal reporting objectives. Due to the complexities in the system of most organization, the system of cost accounting is equally becoming complex and resultantly a body of professional with special expertise in this created. The body of professional is called the management accountant and the area of study is known as management accounting.
Woody et al (2005) define management accounting as the process of identification, measuring, accumulating, analyzing, preparation and communication of financial information used by management to plan events and control within an organization and to ensure proper use and accountability of its resources. From the above definition, it means that the management accountant has a range of function to carry out in the organization.
According to ICMA “management accounting is the presentation of accounting information in such a way as to assist management in the creation of policies and the day-to-day operation of an undertaking” To achieve this aim, the management accountant is interested in the past, the present and the future useful information can be extracted from past result which together with report of current future enable the management to evaluate current result more readily and may also reveals areas of business which requires corrective actions.
David Fanning (1983) defined management accounting as “the application of professional knowledge and skill in the preparation and the presentation of accounting information in a way to assist the management in the formulation of policies and in planning and control of operating of the undertaken. It is designed to provide information and selecting short run and long run goals and implementing plans appraising performance and pin pointing deviations for plan.
To be able to do all there, the management accountant must possess some knowledge of accounting. He must have a thorough understanding of the operations of the organization in which these system are implemented and the appropriate technology to apply in each case for the provision of management information. Information provision depends solely on type of business. It is obvious that the management of a manufacturing company will need information that will enable them consider the factor affecting cost of production, cost of classification, cost reduction, product pricing, market share of the products, choice of the product lines, diversification and investment. However, a trading company needs information that will concentrate decision on customers demand’s advertisement and product branding.
The management accountant uses data from the financial and cost accounting system to perform his task. He conducts special investigations and uses accounting and other appropriate techniques from statistics and operation research. He considers human element in all activities so that at all times he will be provided with information which is relevant for carrying out his work effectively so as to maintain his value or even enhance it. In addition, he interprets data and communicate same to the management.
The inability of the management accountant to perform his duties would result in shortage of information for long and short run planning system and the necessary control to be made the basic objective behind the continuous existence of business organization is the need to increase its wealth through profit making. It actually ranks highest among the objectives of business organizations and the management needs accurate and timely information for decision making in order to achieve this noble objective.
Weldi (1976) opines that profit maximization can only come through an efficient country. It is clear that the cost of running a business is increasing at a very high rate. Many manufacturing companies in Nigeria has this as a problem. They struggle to maintain reasonable amount of earning in a situation where cost are rising thereby making profit margin more and more difficult to sustain. Meanwhile, the Manufacturing Association of Nigeria (MAN) in its 2009 economic review are faced with the escalating cost of production policies which are inflationary in nature. This trend reinforces the imperativeness of the application of sound management accounting technique in the manufacturing companies.
Interestingly, Adewumi (1989) posits that management practices is yet to have its rightful place in Nigerian manufacturing companies. The implication is that the principle of management is rarely applied in most manufacturing firms in Nigeria.
A careful study of Nigeria manufacturing companies shows as decrease in productivity. This is as a result of gross incompetence and lack of motivation on the part of the top management and their subordinates, consequently there has with the general planning and control of the firm’s resources. Thus, profit maximization is firmly rooted in the effectiveness of the planning and control of the firm resources. Generally speaking, the role of management accountant is based on his technical knowledge experience and judgment in contributing to the success of the manufacturing industry.
Statement of problem
There has been a considerable lack of appreciation by many as the intrinsic value of management. Manufacturers like other business execution have had to appreciate where such value have stimulated the development of management accounting as an information tools in business organizations. Such events includes the increased competition in business and rapidly developing technology. The resultant changes that have emerged have intensified managers need for information beyond that which is contained in the traditional income statement and balance sheet.
Over the last three decades, products have become obsolete at an alarming rate. The advent of scientific breakthrough have resulted in the development of many new basic components such as the transistor and electronic “chip” which have literally revolutionalized many industries and their products. Scientific researcher have taken place in production method over the last three decades. The term “automation” has crept in and today many products are produces ritually untouched by human hands. For example, oil refinery operations are controlled by massive computer networks machine tools are electronically controlled and there are even some entire manufacturing plan where workmen do little more than monitoring instrument panel modes of management and method of decision making have been affected by the development of new and powerful quantitative tools such as linear programming probability analysis and decision theory. These new tools which have come to be from the mathematical and statistical sciences are becoming indispensable in day-to-day decision making. The problem of increase cost of production have forced the companies involved to make many adjustment which include modification of product changes in the methods of production and even marketing and the discovering of new sources of financing production. Some company go as far as reducing the quality of raw material and end up producing less quality of raw material which cannot help matters in the long run.
The economic impact of these and other factors have been far reaching as manager of companies are now competiting and cost of production escalating. These has in effect expanded the role of management accountant as an information tools over the years.
There is also the problem of poor inventory management which leads to overstocking thereby tying down the company’s working capital.
Another kind of problem that is facing some companies is the installation of improper plans to reduce cost of production so as to maximize profit e.g making use of low quality raw material.
Objective of the study
It is the roles of management accountant to analyze information and the technique employed to the achievement of profit maximization. The purpose of this study therefore is to intimate the top level managers of the crucial role of the management accountant in the overall management process planning and controlling in order to ensure profit maximization.
Scope of the study
In a bid to keep the profit within a manageable limit and in view of the limited tine and resources available to the researchers, he has localized and confined the study to the manufacturing companies in Enugu.
Significance of the study
The management accountant makes the necessary information available to the management by the application of his skills and knowledge.
The significance of this study is to bring to the notice of the management the exemplary role of the management accountant and the techniques use to provide information and also how these would affect the operations and the attainment of the organization goal if the information recommended for use by the management. With such knowledge and information put to use, management would be able to plan, control the organization such that the cost of operating the business will be at a minimum while profit will be employed at the end.
Research question
From the statement of problem, the study is aimed at providing answers to the following questions.
Ho: Cost are not classified by management accountant to provide useful
information for profit planning.
Hi: Cost are classified by management accountant to provide useful
information for profit planning.
Ho: Management accounting techniques has no salutary impact on profit
Maximization.
Hi: Management accounting techniques has a salutary impact on profit
Maximization.
Ho: The company’s fixed cost are not constant over the relevant range of
Output.
Hi: The company’s fixed cost are not constant over the relevant range of
Output.
DISCLAIMER: All project works, files and documents posted on this website, eProjectTopics.com are the property/copyright of their respective owners. They are for research reference/guidance purposes only and some of the works may be crowd-sourced. Please don’t submit someone’s work as your own to avoid plagiarism and its consequences. Use it as a reference/citation/guidance purpose only and not copy the work word for word (verbatim). The paper should be used as a guide or framework for your own paper. The contents of this paper should be able to help you in generating new ideas and thoughts for your own study. eProjectTopics.com is a repository of research works where works are uploaded for research guidance. Our aim of providing this work is to help you eradicate the stress of going from one school library to another in search of research materials. This is a legal service because all tertiary institutions permit their students to read previous works, projects, books, articles, journals or papers while developing their own works. This is where the need for literature review comes in. “What a good artist understands is that nothing comes from nowhere. The paid subscription on eProjectTopics.com is a means by which the website is maintained to support Open Education. If you see your work posted here by any means, and you want it to be removed/credited, please contact us with the web address link to the work. We will reply to and honour every request. Please notice it may take up to 24 – 48 hours to process your request.
