IMPACT OF STANDARD COST ON COST OF PRODUCTION IN THE NIGERIAN MANUFACTURING FIRMS
International Journal of Business Management and Economic Research
The study examined the impact of standard cost on cost of production of some manufacturing firms in Nigeria. A sample of 147 respondents from about 26 manufacturing firms is used for the analysis. Both descriptive and inferential statistics techniques are used to analysis the responses of the respondents on various questions that bothers on value relevance of standard cost in cost control in their originations. Firstly the results shows that contrary to some opinions that standards cost
... es is no longer in vogue, the study finds out that about 85% of the manufacturing firms sampled are still applying standard cost techniques to cost control in their various organizations. Again the study shows that the decision of these manufacturing firms to continue to use standard cost is because of its effectiveness in minimizing the cost of raw material as well as overheads cost of the organization. However, application of standard cost to personnel cost appears not be in vogue. It is recommended that manufacturing firms should emulate these firms that are minimizing their cost via application standard cost and also find a way of applying it to labour cost efficiently. Keyword: Standard cost, raw material cost, overheads cost, labour cost. necessary. ICAN (2006) also states further that the setting of standard costs for comparisms with actual costs will employ budgetary control and standard control tools.