Cost controls and profitability in manufacturing firms in Hargeisa, Somalia
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Date
2018-04
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Publisher
College of Economics and Management
Abstract
The study sought to assess the effect of cost controls on profitability of manufacturing firms in Hargeisa- Somalia. It was guided by three specific objectives, that included i) determining the effect of budget control on profitability of manufacturing firms in Hargeisa Somalia; ii) examining the effect of cost allocation on profitability of manufacturing firms in Hargeisa Somalia and (iii) to establish the effect of cost monitoring and control on profitability of manufacturing firms in Hargeisa Somalia. This research employed a descriptive research design to describe the variables, the questionnaire and interview guide were used as the research instruments. Descriptive statistics were used in this study included frequencies, means on analysis on variables. The findings revealed the following: The findings indicated that budget control significantly affects the profitability of manufacturing firms in Hargeisa Somalia, this effect therefore implies that budget control highly contribute to the profitability of Manufacturing firms in Hargeisa Somalia, the findings revealed that there is a significant effect cost allocation has on profitability of manufacturing firms in Hargeisa Somalia, findings of this study proved a positive significant effect cost monitoring has on profitability of manufacturing firms in Hargeisa Somalia. Still the researcher concluded that; budget control has a considerably high influence on the profitability of the manufacturing organizations, hence there is need for improving the budgetary controls to enhance profitability, cost allocation has a weak significant effect on profitability of manufacturing firms in Hargeisa Somalia and this indicates that cost allocation has a high bearing on profitability of the manufacturing organizations, and finally cost monitoring has a positive significant effect on profitability of manufacturing firms in Hargeisa Somalia and hence indicating that cost monitoring has a bearing on the profitability hence there is need for enhancing monitoring given the state of the profits though other factors complemented in the study. The researcher recommended that: there is need to enhance the budgetary controls through improving the mechanism for budgeting as the mechanism for enhancing profitability, there is need for managers who are responsible for the setting cost allocation standards to be educated on the relevance for the costs of the manufacturing firms. Adherence to the standard costing information should be practiced by the top management as it is a tool for the improvement of profit in the manufacturing firms. The study contributed to new knowledge through the following; One of the most prominent findings from this study is the fact that it has provided evidence to support the fact that cost control can improve the state of profitability of the manufacturing organizations mechanism in Hargeisa Somalia.
Description
A thesis submitted to the College Of Economics and Management in partial fulfillment of the requirement for the award of Master of Business Administration Degree in Accounting And Finance of Kampala International University