The effect of cost management strategies on financial performance of manufacturing firms in Kampala: a case study of Britania Allied Industries Limited
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Date
2018-09
Authors
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Publisher
Kampala International University, College of Economics and Management
Abstract
The study examined the effect of cost management on financial performance of manufacturing
firms in Kampala from which Britannia Allied Industries Limited was used as a case study. The
research also capitalized on three objectives which requires to determining the effect of material
costing, labour costing and overhead costing on financial performance. In this study, internal cost
management was used as an independent variable whereas financial performance as a dependent
variable. The study employed stratified, simple random and purposive sampling techniques to
draw representative samples and a sample size of 60 respondents was determined from a
population of 65 members using Slovenes formula. Closes-ended questionnaires with five point
like11 scale were used to obtain response. During this research data was carefully collected,
classified and analyzed using frequency tables and data was summarized using graphs and charts.
The findings of the study revealed that there is a significant effect between cost management and
financial performance. This is because the three indicators of cost management researched on
showed that on average, over 85% of the respondents believed that an effective cost management
system that include material costing, labour costing and overhead costing would ensure effective
financial performance to manufacturing firms. Finally, the researcher suggested some
recommendations which included sourcing for cheaper & high quality materials, employing an
integrated material costing system that traces materials from the point of making orders to when
goods are dispersed for use in production, employing experienced labour, dischargi ng
unproductive labour, and apportioning overheads to production among others. All these
recommendations are focused towards reducing production costs as profits can be improved
(since unit profit = unit selling price- unit production cost) hence leading to effective financial
performance.
Description
A research report submitted to the College Of Economics and Management in partial fulfillment of the requirements for the Award of a Bachelor’s Degree in Business Administration from Kampala International University
Keywords
Management, Cost, Performance, Financial