ABSTRACT

The main objective of the study is to examine the effect of indirect cost on the financial performance of firms in Nigeria. This study adopts ex-post facto research design which involves the ascertaining of the impact of past factors on the present happening or event and the research work adopts the secondary source of data in obtaining all the data needed for the study. The descriptive statistics is used to summarize the collected data in a clear and understandable way using numerical approach. The multiple regression technique using ordinary least square regression (OLS) method is adopted in investigating the relationship between the dependent and independent variables. In line with the first specific objective which was set to examine the effect of cost of rent on the profitability of listed firms in Nigeria, hypothesis was tested and the result revealed that cost of rent has no significant effect on the profitability of listed firms in Nigeria. In conclusion, we can see that cost of rent has a positive insignificant effect on the profitability of listed brewery firms in Nigeria and that salaries & wage has a negative significant effect on the profitability of listed brewery firms in Nigeria. I therefore recommend that listed firms in Nigeria should incorporate a cost reduction policy that enables cost efficiency and effectiveness these will enhance the profitability of the firms.

TABLE OF CONTENT

Title page                                                                                                                                i

Declaration                                                                                                                              ii

Certification                                                                                                                            iii

Dedication                                                                                                                              iv

Acknowledgements                                                                                                                v

Table of Contents                                                                                                                   vi

Abstract                                                                                                                                  ix

CHAPTER ONE: INTODUCTION

1.1 Background to the study                                                                                                  1

1.2 Statement of the problem                                                                                                 2

1.3 Objective of the study                                                                                                     3

1.4 Research question                                                                                                             4

1.5 Research hypothesis                                                                                                          4

1.6 Significance of the study                                                                                                  4

1.7 Scope of the study                                                                                                                        5

1.8 Limitations of the study                                                                                                   5

CHAPTER TWO: REVIEW OF RELATED LITERATURE

2.1 Conceptual Framework                                                                                                     7

2.1.1 Concept of indirect cost                                                                                                8

2.1.2 Cost of classification                                                                                                     10

2.1.3 Cost behavior                                                                                                                 12

2.1.4 Costing systems and costing methods                                                                           16

2.2 Theoretical Framework                                                                                                     18

2.2.1 Kaizen costing theory                                                                                                    18

2.2.2 The trade-off theory                                                                                                      19

2.3 Empirical review                                                                                                               19

CHAPTER THREE: RESEARCH METHODOLOGY

3.1 Research design                                                                                                                26

3.2 Population of the study                                                                                                    27

3.3 Sample size and sampling technique                                                                                 27

3.4 Source of data                                                                                                                   27

3.5 Data analysis technique                                                                                                    27

3.6 Definition of Variables                                                                                                     28

3.6.1 Independent variable                                                                                                     28

3.6.2 Dependent variable                                                                                                         28

3.7 Model specification                                                                                                          28

3.8 Limitation of the methodology                                                                                         29

CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS

4.1 Data presentation                                                                                                              30

4.2 DATA ANALYSIS                                                                                                         30

4.2.1 Data validity test                                                                                                           30

4.2.2 Descriptive statistics                                                                                                      31

4.2.3 Regression of the estimated model summary                                                                32

4.2.4 Regression results                                                                                                          34

4.2.5 Test for research hypotheses                                                                                          35

4.2.5.1 Test for research hypothesis one                                                                                  35

4.2.5.2 Test for research hypothesis two                                                                                35

4.2.5.3 Test for research hypothesis three                                                                               35

4.3 Discussion of findings                                                                                                      36

CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary of findings                                                                                                        38

5.2 Conclusions                                                                                                                       38

5.3 Recommendations                                                                                                            39

5.4 Limitations of the study                                                                                                   39

5.5 Suggestions for further research                                                                                       40

References                                                                                                                              43

Appendices