The primary objective of this research project work is to examine critically the various cost control measures being used by manufacturing organization using project development institute as a case study; and to propose alternative course of action if necessary. Concentration has therefore been made on the important factor necessary for the fulfillment of this objectives.
Also, in the research is the danger or rather the consequences of uncontrolled cost the need and possible methods of cost control. The methods have been found necessary in intimating manufacturing organizations with the act of controlling their production costs which will avail then the opportunity or maximization profit without much prices increases.
It is therefore suggested in the study that manufacturing organizations and public corporations should get acquainted with the techniques developed in this projects report and apply them wherever possible in controlling their production cost.
Chapter one of this projects report is introductions chapter two discusses the literature review, while chapter three and four deal with the methodology of data accumulation and analysis of data. The final chapter, chapter five, gives the conclusion and recommendation of this wok.
The target of most business organization is maximization of profit. Profit exists when the income obtained is above the expenditure. It is the excess of revenue over cost or expenditure. At times profit can only exist when there is an increase in selling price of the product or reduction in the cost of manufacturing. Since excessive price increase is dreaded by the public, it becomes vital to achieve the business objectives through production cost control of each product.
The necessity of production cost control is to bring about this research which is to be undertaken to give actual background on the cost control, the need for the control, cost items to be controlled and the effect of uncontrolled production costs on the organization.
In the course of this research, the researcher will encounter some constraints such as time constraints, financial constraint ad inadequate materials
Some recommendations will be made which if implemented will enhance abundant or more profit, quality product and control of raw mate
INTRODUCTION
LITERATURE REVIEW
DATA ANALYSIS AND DISCUSSION
FINDINGS, RECOMMENDATION AND CONCLUSION
APPENDICES
NOTE
APPENDICES B
QUESTIONNAIRE
APPENDICE C
ORGNAIZATION CHART
BILIOGRAPHY
INTRODUCTION
The purpose of this research is a modest of attempt to verify the indiscriminate increase in the prices of commodities produced by manufacturing organization in this part of the country which has attracted the attention of many citizens, especially those who know the implications of this continuous rise continuous rise in prices on the people and on the nation’s economy.
This rapid increase in price of manufactured goods can be attributed to cost of production of goods and it is for this reason that the need for the control arises. Moreover, in compliance with the current drive towards structural Adjustment programme (SAP), these organizations are now caught up in the need to control their production cost.
This research paper will, therefore, attempt to give a comprehensive account of the control of costs in the field of production with particular emphasis on manufacturing organizations.
The feature of every organizations the pursuit of a goal and this goal or objective exists in different dimensions.
It is evident, therefore that every manufacturing organization, whether sole, partnership, corporation, among others, must have an objective and the primary objective of these organization is to maximize profit. Any other objective such as social service is purely secondary and generally dependent n profit.
Profit is the excess of total income over total cost during a specific period of time. It follows therefore, that for organizations to make profit, they must control over the cost of their productions and services.
Manufacturing is the transformation of materials into finished goods through the use of labour and factory facilities. It is clear that currently, the price of materials are so exorbitant to the extent that manufacturing companies are in a serious profit squeeze. They are struggling to maintain satisfactory earnings in a situation where costs are rising but some industrialist contend that profit increases are becoming more difficult to obtain ever at less proportionate degree to costs. Foreign and domestic competition as well as governmental efforts to prevent further inflation put serious restraints on additional increases. In addition to these, are governmental, (both or state and federal levels, stabilization measures aimed at re-structuring and improving the economy, and their attendant cost effect. Some of these measures like the second tier foreign exchange Market (SFEM)and structural adjustment programme have had the effects of not only causing increased prices as a result of increased cost of inputs, but have gone further to multiply in –built imported inflation by the incremental exchange rate of he Naira against the convertible currencies that are used in importation.
These governmental structural re-adjustment measures have contributed to a great in rendering most profit seeking long range plans of companies ineffective. Thus, most, of these companies are compelled by the prevailing economic circumstances to be more interested in research and development for the expansion of profit margins of already existing products. This will as well help them to avoid diversification. This quest for increased profit margins in the light of the near fixed nature of revenue, implies that the achievement of same depends wholly on prudent management of costs.
To maintain the level of earnings or to increase earnings following these situations, many companies are taking strong steps to control costs, if not reduce costs, do away with waste and increase productivity. The industrial revolution which brought about improvemenrs in tehcnological techniques do help to control and reduce costs but are in most cases not adequate.
The members of management board of most companies are putting pressure onthier orgnaizations at every poisnt. Jobs are being timed and standards set in manufacturing department where timing and standards did not exist previously. These procedures have also been extended into office operations. Budgets are being made more detailed” they are tighter. Religiously adhered to and are controlled more vigorously.
These developments are typical of a current emphasis in Nigeria business. In those wise, the manufacturing organization are not left our. In order to ensure their survival and also to create more positive impacts on the economic growth, many methods of cost control are being utilized. The purpose of this research work therefore, is to examine critically the various cost control measures being used by manufacturing organizations using project development Agency (PRODA) as a case study, the consequence of these measures (long range as well as short range), and to purpose alternative courses of action if necessary with more promising long range results. The project development agency was chosen as the case study because it is a large outstanding institute which has embarked on the manufacturing of many products in this country, and because of the indiscriminate rise in prices of their products which is attributed to the cost of productions.
The institute was established by East central stated Edict No.11 of 1971. It was a post-war creation of the then administrator of east central stated, Ukpabi Asika to Channel through applied research and technological innovation, the energies and newly found self-confidence of the indigenous engineers, scientists and technicians into the solution of problems of industrial development of the state and Nigeria in general.
Before it was officially promulgated as a statutory corporation in April 1971, Projects development agency (PRODA) existed as a department under the east central state ministry of trade and industry. In April 1976, the institute was taken over by the federal military government when the former east central state was saplit into Anambra and Imo states. As a result of this, it became one of the research institutes under the defunct national science and technology development agency (NSTDA). Thus the name automatically changed to project development institute. However, the acronym remains (PRODA)
The institute which is situated in Enugu, Enugu state of Nigeria has manufactured many products some of which are: 270-egg kerosene-heated chicken egg incubator which is intended for use by the individual farmer. This chicken egg incubator simulates the conditions which obtain under the mother-hen when she sits on eggs. The institute has also embarked on the “Empirical formulation of Raw Glazes” to suit pottery bodies. Test pieces of the ceramics bodies for which these glazes by dipping, dried and fired to a range of temperature (10500c to 1280oc) . This glaze was found to be gaze resistant, and gave a very pleasant sheen at temperatures above 120o0c.
The institute has manufactured A2 – Burner kero-oven. This kerosene heated domestic oven is used for the braking of bread and cakes, and the drying grains. Also there was manufacturing of local carbonization plant by the ins
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