Showing posts with label Cost. Show all posts
Showing posts with label Cost. Show all posts

Saturday, 7 January 2023

ALL COST ARE MANAGEMENT ACCOUNTING DISCUSS

ALL COST ARE MANAGEMENT ACCOUNTING DISCUSS

CHAPTER ONE: INTRODUCTION

  1. Background to the study

Management accounting collects data from cost accounting and financial accounting. Thereafter, it analyzes and interprets the data to prepare reports and provide necessary information to the management.On the other hand, cost books are prepared in cost accounting system from data as received from financial accounting at the end of each accounting period.In management accounting or managerial accounting, managers use the provisions of accounting information in order to better inform themselves before they decide matters within their organizations, which aids their management and performance of control functions.

One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers.According to the Institute of Management Accountants (IMA): “Management accounting is a profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist management in the formulation and implementation of an organization’s strategy”. Management accountants (also called managerial accountants) look at the events that happen in and around a business while considering the needs of the business. From this, data and estimates emerge. Cost accounting is the process of translating these estimates and data into knowledge that will ultimately be used to guide decision-making.

The Chartered Institute of Management Accountants (CIMA), the largest management accounting institute with over 100,000 members describes “Management accounting as analysing information to advise business strategy and drive sustainable business success”.

Cost accounting is an input into management accounting. Cost accounting focuses on understanding and optimizing costs in a complex business environment. Management accounting focuses on the bigger picture of using data to make planning and strategy decisions for the company. Cost accounting tracks and analyzes costs, including material, labor, overhead and time, for every activity performed in producing and delivering goods and services. This information can be used to improve efficiencies and reduce overall cost.

The objective of management accounting is to collecting data to prepare budgets for organizations. The purpose of management accounting system is to properly use the management accounts to achieve the organizational objective. The management control system is very broad term it not only controls the management accounting system but also control the personal and groups issues.

Management accounting control system highly influences the business environment. The role of management accounting control system providing the information to accountant and control managers for planning, controlling and measuring the performance in the organizations. The important changes in the environment are highly influences by management accounting control system. Without effective management accounting control system no organization can be flourishing.

  1. Statement of the Problem

In recent years, the cost of products in Nigeria has been very expensive beyond the reach of common Nigerians. This cost challenges has made many products manufactured in the country unpatronized by the consumers, and as a result of that expires in the hands of the sellers. Management accountants are assigned with managing cost elements of products among other responsibilities. He aligns cost with efficiency; provide required information for cost minimization so that profit could be maximized.  In making a sound decision the management needs some valuable and accurate information from the accountant. The accountant is at the services of the management by providing the management with the necessary information which they need for decision making. In recent times, it was observed that cases of mismanagement, fraud and irregularities prevail in the organization.

  1. Research Questions

 In attempt to achieve the objective of this study, the research seeks to find answer to the following research question:

  1. Are all cost management accounting?
  2. What is the difference between cost accounting and management accounting?
  1. Objectives of the study

The aim of this research is ascertain whether all costs are management accounting. The specific objectives of this study are;

  1. To determine whether all cost are management accounting.
  2. To identify the difference between cost accounting and management accounting.
  1. Statement of Hypotheses

The following are the hypothesis which this research tries to test:

H0: All cost are management accounting

H1: All cost are not management accounting

  1. Significance of the study

The management accounting makes the necessary information available to the management. The significance of this study is to bring to the notice of the management the exemplary role of the management accounting and the technique used to provide information and also how these would affect the operations and the attainment of the organizational goal if these information provided are not recommended for use by the management. And with such knowledge and information put to use, management would be able to plan and control the organization such that the cost of operating the business will be at a minimum while profit will be maximized.

Finally, this work will be of immense help to students, researchers and scholars as it will open a new area of study for further research and also form a basis for view of related literature.

  1. Scope of the study

The scope of this research is on the examination of cost and management accounting with the sole aim of determining whether all cost accounting are management accounting.

  1. Limitations of the study

In the process of carrying out this research work, the most nagging problem facing the study is how to obtain reference materials. The time to carry out the research is short and insufficient, since it is done alongside with some other courses to contend with so as to present a good result.

  1. Definition of Terms

Accountant: An accountant is a practitioner of accountancy or accounting (referred as an accounting in the united states), which is the measurement, disclosure or provision of assurance about financial information that helps managers, investors, tax authorities and others make decisions about allocating resources.

Management Accountant: are those key officers that provide business data and analysis to managers within organizations to assist in decision making and control.

Profit maximization: A process that companies undergo to determine the best output and price levels in order to maximize its return. The company will usually adjust influential factors such as production costs, price of goods and output level as a way of reaching its profit goal.

Performance; General accomplishment of a given task measured against present standards of accuracy, completeness, cost and speed.

Management: This is defined as the process of dealing with or controlling things or people. It is the responsibility for control of a company or similar organization.

Information: this means data that is accurate and timely, specific and organized for a purpose, presented within a context that gives it meaning and relevance, and can lead to an increase in understanding and decrease in uncertainty. Information is valuable because it can affect a decision or an outcome. For e.g.,if a manager is told, his companys’ net profit decreased in the past month, he may use this information as a reason to cut financial spending for the next month.

Decision making: The thought process of selecting a logical choice from the available option. It is done to achieve a specific objective or solve a specific problem

Sunday, 29 October 2017

COMPARATIVE ASSESSMENT OF FACTORS AFFECTING COST OF INDUSTRIALIZED BUILDING AND CONVENTIONAL BUILDING SYSTEM IN NIGERIA


 COMPARATIVE ASSESSMENT OF FACTORS AFFECTING COST OF INDUSTRIALIZED BUILDING AND CONVENTIONAL BUILDING SYSTEM IN NIGERIA

ABSTRACT

The main aim of this research work is to compare the factors affecting cost of industrialized building and conventional building system in Nigeria. The research method used in collecting data was through the use of questionnaire administered to construction professionals in Nigerian construction industry. Seventy questionnaires were administered and fifty five were returned with response rate of 73%. The instrument used in analyzing data collected was relative importance index (RI!) to rank the factors affecting the two systems in Nigeria. From the analysis it was discovered that the major factors affecting cost of industrialized building and conventional building system in Nigeria were unstable government policy, inadequate manufacturing facilities, high cost of overhead, availability of expertise, scope of work, suitable construction environment, bureaucracy, materials waste, high cost of construction, availability of land with relative importance index of 0.82, 0.8, 0.79, 0.78, 0.77, 0.76 respectively. It was recommended that government should help in reducing the cost of building components, materials, plants and equipment and they should also set an example of patronizing the industrialized building system just as conventional building system and they should not be too strict in policy making. In conclusion the major factors affecting cost of industrialized building and conventional building system in Nigeria were unstable government policy, inadequate manufacturing facilities, high cost of overhead, availability of expertise, scope of work, suitable construction environment, high cost of construction, availability of land respectively.

CHAPTER ONE
INTRODUCTION
1.1      Background of the study
Construction system is undergoing a translational change from a construction industry employing conventional construction to a more modernized and advanced system. Like a pre-fabricated component system, steel framing system, block work and mould system and timber framing system in all such system is known as industrialized building system (IBS).In this new technique of construction in order to increase the productivity of construction and improve quality of work. The system can be used good construction, equipment, materials and better project planning. This study is present and defined actual difference between conventional and industrialized building system, which can provide the necessary information on the building cost comparison between the two systems. 

This study also addresses the building cost comparison, more advantages and effective in between the two systems. Such provides the details building cost indicates which of the two are cheaper.
Conventional building method is defined as components of the building that are pre-fabricated on site through the processes or timber/plywood formwork installation, steel reinforcement and cast institute. Conventional building is mostly built of reinforced concrete frames. The traditional construction method uses wooden formwork. It is much more costly for construction which includes labour, raw material, transportation and low speed of construction time.

Industrialized building system is an advancement of the new construction technology in the Nigerian construction industry of today. It is an alternative of construction that can change many aspects in building construction. The industrialized building system is a construction system that is built using prefabricated components and is systematically done using machine, formworks and other forms of mechanical equipment. The components are manufactured offsite and once completed will be delivered to construction sites for assembly and erection. It is also can be interpreted as a system which components is manufactured in factory and then installed on site based on the size and dimension of the component required. Furthermore, systems in which concrete components prefabricated at site or in factory are assemble to form the structure with minimum in situ concrete.

Currently, the industrialized building and conventional building system in Nigeria has gradually widely used as a modern method of construction. As an example, the industrialized building system (IBS) and conventional building system has been applied in several projects such as Coca-Cola industry in FCT Abuja, Benue brewery industry in Benue state and Benue Cement Company in Yandev Gboko Federal Housing Authority Lugbe, Mass Housing Construction FCT Abuja, and residential building in FCT Abuja etc. The implementation of industrialized building system (IBS) and conventional building system in Nigeria is reducing the entrance of foreign labour and to expedite the progress of the construction.

The common types of industrialized building system which are generally used in construction are pre-cast concrete framing, panel and box systems, steel formwork system, steel framing system, prefabricated timber framing system, and block work system.

Industrialized building system (IBS) has proven that it can contribute many advantages in construction project. The industrialized building system (IBS) can reduce the number of unskilled and foreign workers on site. The presence of them can increase cost and wastage in construction industry.

1.2      Statement of the Problem
ABDULAZIZ (2002) stated that the cost of industrialized building system for medium and most low rise housing has been higher than that of traditional /conventional built dwelling though the shells were erected more quickly. Hence there is higher cost in industrialized building compared with conventional buildings it becomes comparative that the factor affecting the two building system must be accessed to proffer solution for the cost of industrialized building and conventional building system.

1.3      The need for the research
The need for this research is to critically compare and accessed the factors which directly or indirectly affect the cost of industrialized building system, and conventional building system and see if they could be controlled or avoided completely.

1.4      Aim and Objective
1.4.1 Aim
This research aims at assessing the factors affecting the cost of industrialized building and conventional building system and to identify ways in which these factors can be controlled.

1.4.2 Objectives
  1. To identify the factors affecting cost of industrialized building and conventional building system in Nigeria.
  2. To evaluate factors affecting the cost of industrialized building and conventional building system in Nigeria.
  3. To establish the most important factors affecting cost of industrialized building and conventional building system in Nigeria.
1.5      Scope and Limitation of the Study
1.5.1 Scope
The scope of this project work is based on the comparative assessment of factors affecting cost of industrialized building and conventional building system in Nigeria.

1.5.2 Limitation
It has not been possible to conduct this research nationwide due to the limited time but the research only carried out in Federal capital territory Abuja and Benue state.


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