THE APPLICATION OF COST-PROFIT VOLUME ANALYSIS IN TAKING BUSINESS DECISIONS


THE APPLICATION OF COST-PROFIT VOLUME ANALYSIS IN TAKING BUSINESS DECISIONS. (A CASE STUDY OF NIGERIA BREWERIES PLC IBADAN)  

TABLE OF CONTENT   

Title Page

Certification

Dedication

Acknowledgment

Table of content

Abstract

CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND  TO THE STUDY

1.2 STATEMENT OF PROBLEM OF THE STUDY

1.3 AIM AND OBJECTIVES OF THE STUDY

1.4 SIGNIFICANCE OF THE STUDY

1.5 SCOPE OF THE STUDY

1.6 LIMITATION, CONSTRAINT  OF THE STUDY

CHAPTER TWO: LITERATURE REVIEW

2.1 THE MEANING OF COST VOLUME PROFIT ANALYSIS

2.2 THE EFFECT OF COST VOLUME PROFIT  ANALYSIS

2.3 THE EQUATION INVOLVE IN USING COST VOLUME 

2.4 LIMITATION OF COST VOLUME PROFIT ANALYSIS

2.5 THE PROFIT  AND VOLUME RATIO INVOLVED IN COST VOLUME ANALYSIS

2.6 THE GRAPHICAL APPROACH

2.7 ASSUMPTION OF BREAK-EVEN ANALYSIS

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 RESEARCH DESIGN

3.2 POPULATION OF THE STUDY

3.3 SAMPLING PROCEDURES

3.4 METHOD OF DATA COLLECTION

3.5 DATA PRESENTATION AND ANALYSIS TECHNIQUE. 

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 BRIEF HISTORY OF CASE STUDY ( NIGERIA BREWERIES PLC)

4.2 DATA PRESENTATION AND ANALYSIS

4.3 HYPOTHESIS TESTING AND DATA ANALYSIS

CHAPTER FIVE: CONCLUSION AND RECOMMENDATION

5.1 SUMMARY

5.2 CONCLUSION

5.3 RECOMMENDATION

        REFERENCE

        BIBLIOGRAPHY

CHAPTER ONE

INTRODUCTION

Cost volume profit analysis is a distinct or unique discipline in the study of management. The cost volume profit has various application in industries from profit planning, formulation of marketing plans as well as decision making on volume.

In decision making, it must be understood that cost volume profit is an important tool in short term planning. It should be ascertained that the relationships that exist between the costs of carrying out a business, the revenue generated from such business as well as the sales of a firm. This is important because in the simplest form it is the cost definition of profit.

The cost volume profit analysis is vital to marketer as it guides in the formulation of plans and control. The treatment of break even point allows the market to know the cost revenue behaviors of the firm, while planning allows management of an organization to minimize risk and uncertainty.

In the study of cost volume profit, the technique used is called break-even analysis, it is concerned with the study of revenue cost in relation to sales volume and particularly the level of activities that produces neither profit nor loss, where revenue equals to cost is the break even point.

The break even point can only be achieved when there is a decision involving price, volume and cost that can be split into two classifications.

The cost volume profit relationship is needed because it represents what profit decision can be made. The company decision on price and output attempts to produce the goods efficiently. If the planning process is effective and efficiently utilized, a profit may result.

1.1 BACKGROUND TO THE STUDY

Concerned has been on cost even since the existence of money replaced by trade by barter.

It was the concentration of manufacturing facilities into factories which gave impetus into the development recognizable cost system.

The early developments were almost entirely related to manufacturing industries. The analysis is used in different prostates i.e. hospital, transport undertaking, local authority’s offices, banks as well as manufacturing companies.

It was realized that the information from financial accounting was insufficient for the numerous decision by the management. Due to this inadequacy, the development of cost accounting of which cost volume profit analysis was used as a means of decision taking.

History had it that there were seven factors which were responsible for this development among which are the increase in industrial activities, the production of war equipment in a contract based on cost plus policy which were known as time and line contract in position of price control by government and competition.

History also had it that this method was use before and during the First World War and to a lessee’s extent during the Second World War. It was used frequently in building trade even in U.S.A at that time and frequently used in modern times.

 Those entire factors combine to create a necessity to determine and analyze cost supported by accurate facts and figures to ensure that cost did not go beyond marketing price or contract price.

During the year, fundamental principle was divided for costing before setting up of a cost accounting system. Therefore, some preliminary investigation has to be made to stand in form of principle to guide management in setting up the system.

These principles are:

⦁ It must be designed to suit the business 

⦁ The cost of the system must be considered in relative to the scope of the business and the benefit to be obtained.

⦁ The requirement of the management and laying out of the factory should be considered

⦁ The method of storing raw materials and of enumerates labour whether by hours or pieces of work or by the combination of the two must also be considered.

⦁ The personalities of the key personnel and the capacity of the office staff should also be considered.

1.2 STATEMENT OF PROBLEM OF THE STUDY

The main concern of this study or problem of this study is to view the impact or application of cost volume profit analysis method of a company’s product in the market it served. Basically the main issue is to know the extent in which cost volume profit analysis effort has led to increase in accountability aspect and profitability level of Nigeria breweries plc Ibadan.

This research work is embarked upon to carry out a critical appraisal and evaluating a current level at which cost volume profit analysis has changed the face of Nigeria breweries plc in terms of their business decision compared to what the organization is practicing before the advent of cost profit analysis as producer of consumable goods in Nigeria market.

1.3 AIMS AND OBJECTIVES OF THE STUDY

Specifically, the aim of this study is to know or examine the application of cost volume profit analysis in taking business decision. To achieve this aim the following objectives shall be proved:

-    To examine the impact or application of cost volume profit analysis method of a company’s product in the market it served

⦁ To find out the extent in which cost volume profit analysis effort has led to increase in accountability aspect and profitability level of Nigeria breweries plc lbadan.

⦁ Also to examine the appraisal and evaluate a current level at which cost volume profit analysis has changed the face of Nigeria breweries plc in term of their business decision compared to what the organization is practicing before.

⦁ To also examine the adventure of cost profit analysis as producer of consumable goods in Nigeria market.

1.4 SIGNIFICANCE OF THE STUDY

The significance of the study is to identify analyze and make recommendation on the application of cost volume profit analysis in taking business decision

The significance to Nigeria breweries plc is to be the first beneficiary to the recommendation given after the research.

The significance of the study to the research is to widen the knowledge of the researcher on the subject matter which is application of cost profit volume analysis in taking business decision, also to educate the researcher on application of cost profit volume analysis in taking business decision.

Finally, the significance of the study to the society at large is for reference purpose more so, for reading purpose for people that find it interesting.

In addition, estimation and application of sales volume is necessary to earn a normal profit, plans can be laid in the areas of marketing, purchasing, production and financing,

1.5 SCOPE OF THE STUDY

The study of cost volume profit centers the usefulness and application of the accounting concept i.e. C.V.P cash tool for management in making business decision, and focus on how to calculate the cost volume profit analysis, computations of the C.V.P analysis as well as its basic principles. And not exempt the assumption behind limitations and the uses of the concept.

Finally a case study of the Nigeria brewery plc lbadan would be investigated under the concept of C.V.P analysis.

1.6 LIMITATIONS AND CONSTRAINTS OF THE STUDY

This study has been hindered by a lot of problems, also the effectiveness of carrying out this research is hindered by the following factors.

A. Poor response: - some staff of the company who are in adequate position to give adequate information declined in doing this. They claimed it is due to organization set up and personal perception, a side the fact that it’s meant for public consumption. 

But personal observations are being carried out and consultation was also made on this study for broad analysis and for easy understanding.

B. Claim of confidentiality: - in case where the staff agreed to respond to questions thrown to them, the information and factors supplied were not adequate. This is as result of confidentiality claimed by the personnel. 

But promise were made to keep the investigation given as secret before they were to supply little information

C. Non- availability of data: - this is another hindrance to the study. The data necessary for the study was not fully supplied and available, its validity is another problem.

But the sources of data for this project work were gathered mostly from textbooks, journals, library and secondary data were also adopted.

D. Time and money constraint: - This project work requires time and money which are not available as a student; there is limit to the sources of income available to researcher.

But money was sourced from other means like borrowing and gifts from relatives to complete the research work. Also, one or two days was left out for the research work.

.

THE APPLICATION OF COST-PROFIT VOLUME ANALYSIS IN TAKING BUSINESS DECISIONS



TYPE IN YOUR TOPIC AND CLICK SEARCH.






RESEARCHWAP.NET
Researchwap.net is an online repository for free project topics and research materials, articles and custom writing of research works. We’re an online resource centre that provides a vast database for students to access numerous research project topics and materials. Researchwap.net guides and assist Postgraduate, Undergraduate and Final Year Students with well researched and quality project topics, topic ideas, research guides and project materials. We’re reliable and trustworthy, and we really understand what is called “time factor”, that is why we’ve simplified the process so that students can get their research projects ready on time. Our platform provides more educational services, such as hiring a writer, research analysis, and software for computer science research and we also seriously adhere to a timely delivery.

TESTIMONIES FROM OUR CLIENTS


Please feel free to carefully review some written and captured responses from our satisfied clients.

  • "Exceptionally outstanding. Highly recommend for all who wish to have effective and excellent project defence. Easily Accessable, Affordable, Effective and effective."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "I saw this website on facebook page and I did not even bother since I was in a hurry to complete my project. But I am totally amazed that when I visited the website and saw the topic I was looking for and I decided to give a try and now I have received it within an hour after ordering the material. Am grateful guys!"

    Hilary Yusuf, United States International University Africa, Nairobi, Kenya.
  • "Researchwap.net is a website I recommend to all student and researchers within and outside the country. The web owners are doing great job and I appreciate them for that. Once again, thank you very much "researchwap.net" and God bless you and your business! ."

    Debby Henry George, Massachusetts Institute of Technology (MIT), Cambridge, USA.
  • "Great User Experience, Nice flows and Superb functionalities.The app is indeed a great tech innovation for greasing the wheels of final year, research and other pedagogical related project works. A trial would definitely convince you."

    Lamilare Valentine, Kwame Nkrumah University, Kumasi, Ghana.
  • "I love what you guys are doing, your material guided me well through my research. Thank you for helping me achieve academic success."

    Sampson, University of Nigeria, Nsukka.
  • "researchwap.com is God-sent! I got good grades in my seminar and project with the help of your service, thank you soooooo much."

    Cynthia, Akwa Ibom State University .
  • "Sorry, it was in my spam folder all along, I should have looked it up properly first. Please keep up the good work, your team is quite commited. Am grateful...I will certainly refer my friends too."

    Elizabeth, Obafemi Awolowo University
  • "Am happy the defense went well, thanks to your articles. I may not be able to express how grateful I am for all your assistance, but on my honour, I owe you guys a good number of referrals. Thank you once again."

    Ali Olanrewaju, Lagos State University.
  • "My Dear Researchwap, initially I never believed one can actually do honest business transactions with Nigerians online until i stumbled into your website. You have broken a new legacy of record as far as am concerned. Keep up the good work!"

    Willie Ekereobong, University of Port Harcourt.
  • "WOW, SO IT'S TRUE??!! I can't believe I got this quality work for just 3k...I thought it was scam ooo. I wouldn't mind if it goes for over 5k, its worth it. Thank you!"

    Theressa, Igbinedion University.
  • "I did not see my project topic on your website so I decided to call your customer care number, the attention I got was epic! I got help from the beginning to the end of my project in just 3 days, they even taught me how to defend my project and I got a 'B' at the end. Thank you so much researchwap.com, infact, I owe my graduating well today to you guys...."

    Joseph, Abia state Polytechnic.
  • "My friend told me about ResearchWap website, I doubted her until I saw her receive her full project in less than 15 miniutes, I tried mine too and got it same, right now, am telling everyone in my school about researchwap.com, no one has to suffer any more writing their project. Thank you for making life easy for me and my fellow students... Keep up the good work"

    Christiana, Landmark University .
  • "I wish I knew you guys when I wrote my first degree project, it took so much time and effort then. Now, with just a click of a button, I got my complete project in less than 15 minutes. You guys are too amazing!."

    Musa, Federal University of Technology Minna
  • "I was scared at first when I saw your website but I decided to risk my last 3k and surprisingly I got my complete project in my email box instantly. This is so nice!!!."

    Ali Obafemi, Ibrahim Badamasi Babangida University, Niger State.
  • To contribute to our success story, send us a feedback or please kindly call 2348037664978.
    Then your comment and contact will be published here also with your consent.

    Thank you for choosing researchwap.com.