ABSTRACT

The theme of this project is the impact of standard costing on cost reduction in manufacturing firms in Abia state. It was limited to five towns in Aba. Of tile sixty-eight manufacturing firms listed by the business directory of tile Manufacturer's Associations of Nigeria (MAN) five were selected in Aba for the purpose of this study. Questionnaires were distributed by hand and only 49 of the returned questionnaires proved adequate for tile purpose of this study which is the effect standard costing techniques has on cost reduction. This study is established to determine whether there are accountants in manufacturing firms and also to determine the extent to which standard costing techniques has helped in reducing cost. In order to achieve these objectives, tile work is divided into five chapters and other necessary appendix for clarification. It has been observed in this study that there has been an increase in the use of standard cost over tile years but there is still a marked death of professionally qualified accounting personnel in Nigerian manufacturing firms, this has led to tile recommendation of the formation of an institute of cost and management accountants of Nigeria to complement tile role of tile institute of chartered accountants of Nigeria (ICAN). This paper also recommends the use of attainable standard costing as a yardstick in standard cost so as to compare actual costs, it also provides the process of setting, revising and monitoring standard, which encourages the re-appraisals of methods, materials, and techniques so as to reduce cost. Two hypotheses were developed for this study and the data were arranged in tables using chi-square method, which indicated that professional competence of top management affect the use of standard setting with regards to profitability in manufacturing firms, and it was recommended that top management shou1dhave adequate forecasting skills. Finally, the 'need for further research in the impact of standard costing was stressed amongst other recommendation.