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An Appraisal Of Cost Accounting System In Manufacturing Company

Download complete final year project materials on An Appraisal Of Cost Accounting System In Manufacturing Company  from chapter one to five including references

Cost accounting is the process of identifying, analyzing, computing and reporting cost to management. This shows that, unlike accounting as a whole (of which cost accounting is a branch), cost accounting has the management of an organization as the user of its information.

Business of all sizes-micro, small and medium and large scale and of all kind; profit and non-profit making whether in the private or public sector need information relating to the cost of goods services they produce and render. Cost accounting is relevant to these business and organizations because it is one of the sources from which information relating to cost can be obtained and effectively managed.


Title page

Approval sheet



Table of content



1.1 statement of problem

1.2 purpose of the study

1.3 the objective of the study

1.4 the scope of the study

1.5 the limitation of the study

1.6 research methodology

1.7 plan of the study

Chapter two

2.1 historical development of cost accounting

2.2 cost accounting

2.3 standard costing and variance analysis

2.4 specific order of costing

2.5 operation costing

2.6 marginal and absorption costing techniques Compared

2.7 the basic elements of cost

chapter three

3.1 historical background of international tobacco

company plc. Ilorin


3.2 organization structure of international tobacco company plc. Ilorin


3.3 activities of international tobacco company plc.  Ilorin


chapter four

4.1 data gathering

4.2 analysis of data and findings

4.3 costing method in international

tobacco company plc. Ilorin

chapter five

5.0 summary, conclusions and recommendation

5.1 conclusion

5.2 recommendation




Cost accounting, a subject that provides management with information relating to costs, is clearly a service to management.

Management of a manufacturing or service organization, private sector or public sector organization, profit-making or non-making profit organization, military or civilian organization would ensure that cost accounting is recorded the necessary attention it deserves. The management of an organization ensures the creation of a department, section or unit to take care of the supply of cost accounting information for managerial decision making.

Cost is defined as sacrifice rendered for benefit derived while in economics it is defined as alternative foregone. Therefore to economists, cost is what must be given up in order to obtain something.

Accountants, extending the perspective of economists, view cost as the value of economic resources used in the production of goods, services, income or profit. This shows that the accountant is always linking the concept of cost to production, as cost is being incurred for the production of goods and services, the generation of revenue (income) or the making of profit (negative, positive or zero).

Accounting has been defined by different experts and different institutions, in different ways. The definition that might probably encompass all other attempts at defining accounting is the one given by the American Accounting Association (AAA). The association defines accounting as the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by user of the information.

Cost accounting is the process of identifying, analyzing, computing and reporting cost to management. This shows that, unlike accounting as a whole (of which cost accounting is a branch), cost accounting has the management of an organization as the user of its information.


The role of cost accounting in the effective and efficient management of company set up is indispensable much. Has also been talked about, the need for accountability in companies. The need for effective management of companies’ resources and the maintenance of clean and fraud less record of business transaction in the company has necessitate the need for proper and efficient management of cost accounting. Being one of the important factors that determine the smooth running and progress of any establishment, costing accounting has its problem as well as its prospect.

However, from the literature review it has been discover that little effort has been directed towards the study of the prospect and problem facing cost accounting in the company completed with the fact that the success or failure of any company has dire effort on generality of populace of the society, hence it is the interest of this study to study the problem and prospect of cost accounting in the company with international tobacco company as a case of study.

The reason for choosing international tobacco company as a case study is the fact that its operation touches life of so many people in the society as it is known that an effective and efficient transpiration system contribute positively to the economy growth of the society. There is a need to know the factors that contribute to the effective and efficient management of cost accounting in the company.

There is need to know the role which cost accounting play in the success or otherwise of any business.


The purpose of this study is to:

  • Find out the problem and prospect of cost accounting in the company.
  • To determine the extent to which the management of cost accounting system can affect the smooth running of the organization.


The objective of the study is to find how the method is used in international company plc, achieves the objective of a cost accounting system which include:

  • i.   To value store, stock and work in progress.
  • ii.  To provide information for planning and control which include decision making by the manager.
  • iii. To provide information for estimating and price determination.
  • iv.  To indicate whether the cost of certain articles or component made in the factory in such that it will be more economical to from outside sources.
  •  v.   To present comparative cost data from different period and various volumes of production output, and to provide guardian in the development of the business.
  •  vi. To show where standard costs are prepared, what the cost of production to be, and with which the actual cost that are eventually recorded may be compared.
  • vii.  To reveal source of economy in production, having regard to methods, types of equipment, design, output and layout, daily, weekly, monthly or quarterly information may be necessary to ensure prompt constructive action.


For a long time, little or no attention has been paid to cost accounting system of a manufacturing concerns and as a result, the inherent is such system has been unnoticed in any business organization; there is always certain costing system adopted, in the recording of the activities of the organization, which normally present detailed cost accounting system information about the business to the outside such costing method to be studies include standard costing marginal and absorption costing technique operation and specified costing.


As already been mention, the topic is really a very wide one and should cover a wide range of items with regards to cost determination their effect and uses in a manufacturing concern. It was also mentioned that since it would be impossible to make an indebt study of all the system of cost accounting could be employed by a manufacturing concern only the important one be dealt with.


Also the study was limited by time and money which formed the major limiting factors. We have tried our best to a project which would be applicable to other branches of Tobacco Company in general.


Generally, there are basic of research methods that are mostly use. These are descriptive and empirical method. Since the study is an inquiring into the system f cost accounting. It’s efficiency or otherwise in international tobacco company plc, the descriptive and empirical methods are used. It is important that necessary data are collected and analysis to enable the researcher draw reasonable conclusion form and to make variable recommendation.


This project was coming out in five chapters.

Chapter one consist of; Introduction of the study, statement of the problem, purpose of the study, the objective of the study, the scope of the study, the limitation of the study, the research methodology as well as the plan of the study.

Chapter two consist of: Literature review, historical development of cost accounting, cost accounting, standard costing and variance analysis, specified order costing, operation costing and marginal and absorption costing techniques compared, and the basic element of cost.

Chapter three consist of; Historical background of ITC plc, Ilorin, organization, organizational structure of ITC plc Ilorin, activities of ITC plc Ilorin.

Chapter four consist of: Data gathering, analysis of data and finding, costing method in ITC plc Ilorin

Chapter five consist of: Conclusion and recommendation, questionnaire and biography.


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