CHAPTER TWO – REVIEW OF LITERATURE
2.1 DEFINITION OF PROFIT MAXIMIZATION 11
2.2 FUNCTIONS OF MANAGEMENT ACCOUTANT
IN RELATION TO PROFIT MAXIMIZATION 17
2.3 WAYS OF REGULATING COST IN A
MANUFACTURING COMPANY 32
CHAPTER THREE – METHODOLOGY
3.1 THE DESIGN 39
3.2 AREA OF STUDY 39
3.3 POPULATION OF STUDY 40
3.4 SAMPLE AND SAMPLING TECHNIQUE 40
3.5 INSTRUMENT FOR DATA COLLECTION 41
3.6 VALIDITY OF AN INSTRUMENT 42
3.7 ADMINISTRATION OF RESEARCH INSTRUMENT 42
3.8 METHOD OF DATA ANALYSIS 42
CHAPTER FOUR – DATA PRESENTATION AND ANALYSIS
4.1 DATA CLASSIFICATION 43
4.2 TEST OF HYPOTHESIS 50
CHAPTER FIVE – DISCUSSION AND CONCLUSION
OF RESULTS
5.1 DISCUSSION OF FINDINGS 56
5.2 CONCLUSION OF THE STUDY 61
5.3 RECOMMENDATIONS 62
5.4 IMPLICATION OF THE FINDINGS 63
5.5 SUGGESTION FOR FURTHER STUDY 64
5.6 LIMITATION OF THE STUDY 65
REFERENCES 66
APPENDICES 68
Modern business organization operates in an environment that is considerably complex. Since the 1970’s managers have had to cope with rising interest rate materials shortage, prices inflation and environmental regulations to mention a few. And the traditional method of analyzing problems and making decision have been found incapable of effectively handling this increasing complexities due to the changes that exist within the environment. It becomes an important characteristic 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 help in 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 organizations, the system of cost accounting is equally becoming complex and resultantly body of professional with special expertise in this is created. This body of professional is called the management accountants and the area of study is known as management accounting.
Woody et al (1985) defined management accounting as the process of identification, measuring, accumulating of financial information used by management to plan events and control within an organization and to ensure proper use and accountability to its resources. From the above definition it means that the management accountant has a range of function to carry out in an 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 in the day-to-day operation of an undertaking” to achieve this aim the management accountant is increased in the past, the present and the future. Useful information can be extracted from past result which together with report of current performance can point the way to immediate management action. In same vein management action. In the since vein forecasting the future enables the management to evaluate the current result more readily and may also reveal 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 presentation of accounting information in a way to assist the management in the formulation of policies and in the planning and control of operation or the undertaking. It is designed to provide information for solving internal problems. The management accounting system of planning and control is designed to spur up and help chief executive to search and select short run and long run goals and implement plans apprising performance and pin-point deviations from plan.
To be able to do all these, the management accountant must posses some knowledge of accounting. He must have a thorough understanding of the operation of the organization in which these systems are implemented and the appropriate technology to apply in each case for the provision of management information. Information provision depends solely on the 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 classification, cost reduction, product pricing market shares of the products, choice of product lines, diversification and investment. However a trading company needs information that will concentrate decision on customers’ demands, 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 use accounting and other appropriate techniques from statistic and operation research. He considers the human element in all activities so that all times he will be provided with information which is relevant for carrying out his work effectively so as of maintain his value or even enhance it. In addition he interprets data and communicates same 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 measures to be made. The basic objective behind the continuous existence of business organization is the need to increase its wealth through profit making.
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