ABSTRCT
This research is conducted as an appraisal of the impact of cost and sales volume variances on management efficiency and profitability of manufacturing firms. In the bid to carry out this work successfully, three hypotheses were formulated as follows: (I) Cost of sales variance has no significant impact on profitability. (2) Sales variance has no significant impact on profitability. (3) Stock variance has no significant impact on management efficiency. Two models are specified using ROCE (Return on Capital employed) and ASTTO (Asset Turnover) as proxies for profitability and management efficiency respectively. On the other hand, COST (cost of sales variance), SALES (Sales variance), LIQ (liquidity), STCKT (stock turnover variance) were used as independent variables. The following results were obtained: The regression analysis result for hypothesis one (1) and two (2). Their partial co-efficient of: COST -1.3232, SALES 0.4154, LIQ -0.1413 and STOCK 0.0322 respectively, based on expectations, behaved as expected except for LIQ, which could be as a result of underutilization of working capital. The variables fit and explain 78% or 63% of variance ROCE. The variables had no significant impact profitability as revealed by the t-statistics except SALES that are statistically significant at 5%. The t-statistic values of the variables. COST, SALES, LIQ and STCKT have t—values of -0.907445, 2.815851, -1.105392 and 0.515346 respectively. For the third hypothesis, the partial co-efficient of the variables are as follows: LlQ2— 0.051846, SALES20.002037 and STCKT20.030093. All variables behaved as expected, though, in case of LlQ2, it is a clear manifestation of under- utilization of working capital as revealed by LlQ2in the first model. Also SALES2is positively related to ASTTO (management efficiency) but not significant even at 5%; it could be that much of the increases in sales must have been as a result of forces of Demand and supply and product satisfaction to consumers, not sequel to management efficiency. As revealed by the result, cost of sales variance has a higher co-efficient of determination but did not create significant impact on profitability firm used as case of study. So the null hypothesis is accepted. On the other hand, sales variance has a significant impact on profitability as reveals by t — statistic. The result informed the decision of alternate hypothesis being accepted and null rejected. Furthermore, the results inform the researcher that the manufacturing firms maintained a good pricing policy for its products to have cushioned the effect of cost of sales on profit and maximized sales. Hence, the third hypothesis measured the impact of stock variance on management efficiency with stock turnover variance given attention. Stock turnover has significant impact on management efficiency as shown from t-statistic, its partial co- efficient also shows a statistical high relationship.
OKEUGO, U (2021). The Impact Of Cost And Sales Volume Variances On Management Efficiency And Profitability Of Manufacturing Firms In Nigeria (A Case Study Of Pz Cussion Nigeria Plc). Mouau.afribary.org: Retrieved Nov 01, 2024, from https://repository.mouau.edu.ng/work/view/the-impact-of-cost-and-sales-volume-variances-on-management-efficiency-and-profitability-of-manufacturing-firms-in-nigeria-a-case-study-of-pz-cussion-nigeria-plc-7-2
UWAOMA, OKEUGO. "The Impact Of Cost And Sales Volume Variances On Management Efficiency And Profitability Of Manufacturing Firms In Nigeria (A Case Study Of Pz Cussion Nigeria Plc)" Mouau.afribary.org. Mouau.afribary.org, 28 Jun. 2021, https://repository.mouau.edu.ng/work/view/the-impact-of-cost-and-sales-volume-variances-on-management-efficiency-and-profitability-of-manufacturing-firms-in-nigeria-a-case-study-of-pz-cussion-nigeria-plc-7-2. Accessed 01 Nov. 2024.
UWAOMA, OKEUGO. "The Impact Of Cost And Sales Volume Variances On Management Efficiency And Profitability Of Manufacturing Firms In Nigeria (A Case Study Of Pz Cussion Nigeria Plc)". Mouau.afribary.org, Mouau.afribary.org, 28 Jun. 2021. Web. 01 Nov. 2024. < https://repository.mouau.edu.ng/work/view/the-impact-of-cost-and-sales-volume-variances-on-management-efficiency-and-profitability-of-manufacturing-firms-in-nigeria-a-case-study-of-pz-cussion-nigeria-plc-7-2 >.
UWAOMA, OKEUGO. "The Impact Of Cost And Sales Volume Variances On Management Efficiency And Profitability Of Manufacturing Firms In Nigeria (A Case Study Of Pz Cussion Nigeria Plc)" Mouau.afribary.org (2021). Accessed 01 Nov. 2024. https://repository.mouau.edu.ng/work/view/the-impact-of-cost-and-sales-volume-variances-on-management-efficiency-and-profitability-of-manufacturing-firms-in-nigeria-a-case-study-of-pz-cussion-nigeria-plc-7-2