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 colleted 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 effect 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 efficiency 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 effective 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.

1.3   Objective of the study

        This is find out the objective of using costing techniques in the measurement of services oriented organization, example standard costing, direct, costing absorption costing etc.  The aim is to know the extent of the use of this technique in planning in the organizations.

1.          To determine the type of costing techniques used in service oriented organizations

2.          To uncertain the effectiveness of the application of these techniques in service oriented organizations

3.          To identify the problem militating against the application of costing techniques in services oriented organizations

4.          To ascertain the difficulty of the unit cost of production and services in services oriented organizations

5.          to ascertain  the difficulty in the  classification of cost into fixed  and  variable components in services oriented organizations.

1.4 Significance of the Study

The findings of this study shall be beneficial to the manager’s management of services oriented companies to be objective in their management skills to achieves the targeted aims and goals of the organization, enables the them to be wise in expenditure management, assist to pave way for accurate budget, create room for diversification this study shall also be beneficial or importance to the board of directions/Government take accurate measures where necessary. It also beneficial to other researchers who may wish to carry out research in related fields.

1.5     Research  Questions

i.            Does the  service oriented organization utilized

The costing techniques in making decision   effectively?

ii.          can the application of costing techniques  

enhance performance and   profitability on service oriented organization?

iii.        Is the adequate manpower in services –oriented organization to manage its costing operation?

1.6     Scope of the study.

     The researcher   narrowed down his investigation to quoted companies which are MTEL and power Holding company of Nigeria and restriated to the Enugu metropoly due to time factor and the large data that would have accompany more coverage.

1.7   Limitation of the study.

Time: time factor possed a constraint to this research project. The apportion of time to research project or work and academic pursuance hinders free an d fast completion o f this project.

    Find:  the  find to  undertake this research  work was not sufficient due  to increase in prices  of  materials and transportation  cost  those limited or restrict the  movement of researchers to areas  where to the acquire the  adequate information for the research work.

Respondents:  some respondents failed to supply the needed information for the project through the research tried and used their skills to get some needed data.

Costing Techniques: The various way of generating a variety of information from cost data for decision making process.This an important tool use by cost accountant in supplying information to the management.

Cost Accounting:

 According to “Anderson’’ cost accounting is  internal cost data accumulation based on set of  cost concept and related accumulation and other analytical techniques necessary for transforming   business  data in to  useful information for management