Abstract:
The objective of this study is to access, evaluate the implications
and the extent by which variations on the cost and volume of production
can affect the profit of an organisation with particular emphasis on
manufacturing industries.
It was a paramount importance to obtain data that are accurate and
relevant so as to enable reasonable conclusion to be drawn from the
study.
Data relevant to this study were obtained from both primary and
secondary sources. The primary sources involve personal interviews and
questionnaire. The rest of the information came from library source. The
information collected was analysed using simple statistical tools, tabular
diagrams and percentage ratios.
The finding of this study revealed that the more the cost acquired
for a particular production without a corresponding increase in the volume
of products reduces profit. Hence, manufacturing industries should
ensure that when cost increases that raw material should equally
increase to manufacture more products to cover the variable and fixed
cost and also retain a reasonable profit for the firm. Also, effective
application of the cost-volume-profit analysis will help management in
attaining its short-term plans and serves as a basis for long-term strategic
plans.
It was therefore, recommended that linear programming, decision
models and techniques are tools of cost-volume-profit analysis, hence, all manufacturing industries have to determine whether their industries is
maximizing profit or freezing out of the market by using the above
mentioned methods or techniques to analyse their cost-volume-profit.
And besides. in the office operation, budgets should be made more
detailed, religiously adhered to and controlled more vigorously so as to
reduce total operational costs.
