Cost accounting: A tool for the management decision making process in Nigeria
Keywords:cost accounting, management decision, decision making, selling price, valuation of inventory, inventory control, labour remuneration, waste reduction
The study, cost accounting, as a tool for management decision making process is targeted at exploring the various ways which cost accounting information could help the management of enterprises especially manufacturing and processing companies in the formation of polices and making of sound and reliable decisions. In order that this purpose could be proven, the researcher formulated various relevant research questions and also two major hypotheses were also formulated. Interview was conducted with the aid of instrument known as questionnaires which were administered to the staff of Tisco’s Pharmaceutical. Chi-square (X2) method was used for testing the hypotheses under the research. Findings exposed that cost accounting is an aid to management decision making. Also, to be clear of every sentiment, relevant literatures complied in authorities in the relevant fields were reviewed. The opinion of authorities was not different, showing that costing information is necessary for fixing selling price, valuation of inventory, inventory control, labour remuneration, waste reduction, capacity utilization, cost control ascertainment of profitability. Thus, the study proves that cost accounting is a tool for management decision making process in any organisation either in public and private sector.
Ahmed, B. and Scapens, H. (2003). Financial Accounting Revised Edition (1978). Dame Publication.
Akujuobi, A.B (2017). Basic Accounting: A Practical Approach. Ever Standard.
Al-Matarna, R. (2003). Enhancing Financial Accountability in Government Parastatals: A Necessity for National Development. The Nigerian Accountant, Journal of the Institute of Chartered Accountant of Nigeria, 39(3), 22-29.
Arneld, D. & Hope, S. (2009). Understanding Financial Statements (6th Edition). Prentice Hall.
Baker et al. (2001). Principles of Local Government Accounting (Chapter Ten). Lagos Publication.
Bettner, D. & Carcello, A. (2008). Government Accounting and Financial Control. Spectrum Books.
Caldwale, H. (2001). Management information and control systems. John Wiley.
Considine, B. and Parkes A. (2010). Accounting Information System: Understanding Business Processes (3rd Edition). John Wiley.
DeVellis, G. (2003, April). Managing profitability information: How to develop a framework for success. Bankers Monthly Magatme.
Gibson, C. H. (2011). Financial Statement Analysis (12th Edition). South-Western Cengage Learning.
Gitman, L. J. & Zutter, C. J. (2012). Principle of Managerial Finance (13th Edition). Prentice Hall Pearson Education.
Glantier, H. and Underdown, N. (2002). Principle of Managerial Finance (13th Edition). Prentice Hall Pearson Education.
Handayani, B. D. (2011). Affecting factors on the use of accounting information for small and medium enterprises (SMEs). Accounting Scientific Journals, 11(1), 50-67.
Harris, J. (2008). Affecting factors on the use of accounting information for small and medium enterprises (SMEs). Journal Akuntabilitas (Accounting Scientific Journals), 11(1), 50-67.
Harson (2009). The management accounting practices in Albania in the context of globalization. Contemporary Economics, 4(3), 149-161.
Harson, S. & Kernut, D. (2015). Managerial accounting (10th Edition). Cengage Learning.
Hodggett, U. (2012). The development of managerial accounting in Germany: A historical analysis. The Accounting Historians Journal, 17(2), 95-112.
Hubber, A. (2017). Business research methods (3rd Ed.). Oxford University.
Ittner, C., & Larcker, D. (2015). Total quality management and the choice of information and reward systems. Journal of Accounting Research, 33(Suppl.), 1-34.
Kim, K. (2018). Organizational coordination and performance in hospital accounting information systems: An empirical examination. The Accounting Review, 472-489.
Kim, Y. (2009). Assessing the organizational fit of a just-in-time manufacturing system: Testing selection, interaction and systems models of contingency theory. Accounting, Organizations & Society, 665–684.
Kroll, K. (2016). Best practices in cash management: Information and automation are key. Business Finance, 12(2), Loveland.
Lawrence, P. & Lorsch, J. (2017). Organization and environment. Harvard University.
Macintosh, N., and Daft, R. (2017). Management control systems and departmental interdependencies: An empirical study. Accounting, Organizations & Society, 49-61.
Marra, M. (2003). Dynamics of evaluation use as organizational knowledge. The case of the World Bank. The George Washington University.
Mbanefo, D. (2017). Problems with contingency theory: Testing assumptions hidden within the language of contingency theory. Administrative Science Quarterly, 26, 349-377.
Melisssa, V. & Bushman, W. (2017, April). Managing profitability information: How to develop a framework for success. Bankers Monthly Magatme.
Messmer, M. (2006). Building financial departments from recruiting to retaining. Financial Executive, 22(2), Morristown.
Pat, B. (2002). Multi-auditor judgment/decision making research. Journal of Accounting Literature, 6, 1-25.
Rezaee, Z. (2005). The relevance of managerial accounting concepts in the banking industry. Journal of Performance Management, 18(2), 3. Atlanta.
Romney, S. & Steinbart, A. (2012). Building financial departments from recruiting to retaining. Financial Executive, 22(2), Morristown.
Simon, N. (2007). Dynamics of evaluation use as organizational knowledge. The case of the World Bank. The George Washington University.
Turban, B. & Aronson, L. (2011). Auditing administrative control: Requisite for sound managerial decisions. The Magazine of Bank Administration, 59(9), 46, Park Ridge.
Wada, U. (2006). Financial Statement Analysis (12th Edition). South-Western Cengage Learning.
Warren et al. (2015). Affecting Factors on the Use of Accounting Information for Small and Medium Enterprises (SMEs). Jurnal Akuntabilitas (Accounting Scientific Journals), 11(1), 50-67.
Zopounidis, I. & Doumpos, S. (2002). Multi-criteria decision aid in financial decision making: Methodologies and literature review. Journal of Multi-criteria Decision Analysis, 11(4-5), 167-186. https://doi.org/10.1002/mcda.333
How to Cite
Copyright (c) 2021 Olanitori Idowu Paul, Fadakinte Bukola Veronica, Olemija Temidayo Lawrence
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Licensing & Copyright Policies
Articles in LASSIJ-IDEA are Open Access contents published under the Creative Commons Attribution-NonCommercial 4.0 International (CC BY-NC 4.0) http://
The copyright policy of LASSIJ-IDEA is based on a non-exclusive publishing agreement, according to which the journal retains the right of first publication, but author(s) are free to subsequently publish their work. The copyright of all work rests with the author(s).
The users may use, reproduce, disseminate or display the article(s) provided that the author(s) are attributed as the original creators and that the reuse is restricted to non-commercial purposes, i.e., research or other educational use. Authors are encouraged to familiarise themselves with the various creative commons licenses.