AN EVALUATION OF COSTING TECHNIQUES IN SERVICE ORIENTED ORGANIZATION

Abstract

The costing techniques of an enterprises is a very vital factor for managerial decision since it influences their returns, risks are consequently, affects their values in the competing market. The research was carried out to ascertain and test the application and relevance of costing techniques, of some service oriented organization in Enugu State, factor affecting the costing techniques, the effect of the application and relevance of costing techniques, in service oriented organization and its impact on the selected organization. The researcher was limited to two service oriented organization namely MTEL and PHCN. The researcher used random sampling method to determine the sample size. The researcher used both Primary and Secondary data. The primary data were collected by the use of well structured questionnaires aided with personal they will no digress in their response from the aim objectives of the study questions.

The researcher also discovered that enterprises just use costing techniques of any combination aiming at no particular mix. The researcher therefore conclude that the costing techniques of the enterprises are not preplanned from the research study, the quoted organization (MTEL and PHCN) has to consistent in their use of a particular techniques either costing techniques or standard techniques, so as to make a good head way and a clear feature.

CHAPTER ONE

INTRODUCTION

This Chapter deals with the following: Background of the study, Statement of the problem, Objective of the study, Significance of the study, Research Question and Scope of the study. 1.1 Background of the Study Nigeria grew from the colonial era in the hand of the British and in the year 1960 she gained her independence in 1960, she had enough agricultural produce which she enjoyed into the seventies (Petroleum) on getting into the 1980’s over economy started deteriorating. There came tremendous fail of our economy, the purchasing power of the naira felt below expectation. Now depend on the outside world for our day today living importation became the order of the day, we no more export any meaningful things from Nigeria.

In the process of revamping the crawling economy, government came up with a programme known Structural Adjustment Programme (SAP) in 1986. This system talks oneself reliance and works through financial market deregulation and reaction to the of the free market process. This is involves SFEM means privatization of government companies. SFEM means second tier foreign exchange market which is now known as Inter-bank foreign Exchange Market (IFEM) service oriented organization were competing since the introduction of this programme and it is only the survive the critical situation. SAP has an adverse eect on the growing economy which gave way to unemployment, fail in standard of living and low capacity utilization. This programme was favourable to some organization and also liquidation some firms. Production cost became high and there is a decline in sales. Consumers wireless paid and their income cannot purchase anything for them. This economy condition can be maneuvered by resorting to product management of their resources with emphasis on costing which is essential and very important for profitability, high productively and eiciency of any organization costing process is merely to known the total cost of goods and services also analysis of composition of the cost which ensure eective control above the element of cost for practice. This shows that good use of costing techniques by the services through such economical programmes like SFEM, SAP etc. The services oriented organization will help them survive through such economical programmes like SFEM, SAP etc. The services oriented organization are the foundations of that costing is an system of costing accumulation or ascertainment with the aim of knowing the cost of goods and services, while costing techniques are the way of generating a variety of information from costing data for management decision making. There are different types of costing techniques standard costing, marginal costing, absorption costing, uniform costing and cash flow analysis. The management determine their use by calling for such information. Looking at all these, the write strongly believe that the costing techniques mentioned can lead on firm through the harsh economic situation.

1.2 Statement of the problem

Service oriented organizations are usually beset with number of problem in using costing techniques for decision making process. The main problem militating against the use of these techniques in taking major managerial decision is the mobility of the accounts departments of these techniques organization preparation different types of these techniques and on time. The management accounts might cost production/ service as well as classification of cost into fixed and variable component. The decision under costing techniques appears more theoretical than real especially in the Nigeria content where advance technology and forecasting techniques are still in their rudimentary stages. Management accountants have been met with serious problem in trying to transforming these theories into practice. It is only when the service organization practically use these sophisticated techniques in making decision that it is relevance will be assured. It is because of the very vital role service oriented business play in the developmental process of a nation and also on account of the fact that costing techniques really constitute a solution to a problem of the sector that the writer decided to make this study.