Thesis Abstract

This
study is designed to appraise the effect of production cost control in a
manufacturing industry/company. The effect of cost control in a manufacturing
industry is varied and highly challenging. They are concerned with future
planning and direct the operation and decision making and other financial
plans, processing financial information falls within their areas of competence.
For effective cost control, the company should practice process costing methods
in it’s true meanings. This means that cost should be ascertained along the production
process for adequate and effective cost control mechanism, this will go along
way in reducing the production cost.

Thesis Overview

1.0 INTRODUCTION

  Manufacturing is the transformation of raw materials into finished goods through the use of labour and the factory facilities. It is clear from this point of view that currently the prices of raw materials are exorbitant to the extent that manufacturing industries are in a serious profit squeeze. They are struggling to maintain satisfactory earnings in a situation that increases are becoming more difficult to obtain even atleast proportional degree of cost.

      Manufacturing companies whether sole
proprietorship, corporation among others must have an objective and the primary
objective of these company is to maximize profits. It therefore follows that
for a company or organization to make profit, it must have control over the
cost of it’s production and services.  

1. BACKGROUND OF THE STUDY

It
is paramount that the feature of every organization is in the pursuit of a
goal(s) and objective and this target exists in different dimension. So to
maintain the level of earning or to increase earnings following this
situations, companies have to take drastic measures to control, if not reduce
costs do away with waste and increase productivity at al ebbs.

This
research work is conducted to see in general the effect of cost in a
manufacturing industry and also to verify the discriminate increase in the price
of commodities produced by companies which have attracted the attention of many
citizens, especially those who know the applications of the continuous rise in
price (inflation) on nation’s economy in general. This rapid increase in price
of manufactured goods can be attributed to the cost of production of goods and
services and it is in light of this reason that the need for cost control
rises.

This research work will therefore attempt to give a comprehensive account of the cost control in the field of manufacturing company with a particular emphasis on Longman furniture company Enugu.

In
other words, the purpose of this study is to examine the various cost control
measure being used in manufacturing company using Longman furniture company as
a case study.

The
consequence of these reasons is necessary because the industry/company involved
in the manufacturing of many products faced with discriminate rise in price of
their product which is attributed to the cost of production, when cost control
is applied the product cost will be reduced.

1.2 STATEMENT
OF THE PROBLEM

      For sometimes, major discussions have
been going on in government circles, among the members of the public and within
private organizations about serious cost control. Some of these problem
include:  

1. The discriminate increase in the price of
   commodity by companies
2. Some manufacturing industries are in a
   serious profit squeeze, struggling to maintain satisfactory earnings.
3. The rapid increase in price of manufactured
   goods as a result of high cost of production of goods and services.

1.3 OBJECTIVE
OF THE STUDY

       The
sole objectives of this study

1. To examine the cost control system in
   operation at Longman furniture company Enugu.
2. To evaluate them as to their effectiveness
   or otherwise
3. To find out all the inherent deficiency
4. To make recommendation for solving
   identified problems and possibly improved and undated any absolute techniques
   lines with recent trends.
5. To find out the effect of cost control in
   the price of a product, growth of the firm and operating expenses.