ABSTRACT
Budgetary control is an integral part of corporate planning which is calculated to achieve the objective of every organization including profitability objective. It is therefore worrisome that some manufacturing companies do not employ budgets as planning technique but just mere annual routine. Budgetary control measures set up by manufacturing organisations have a way of influencing profitability, such that if these controls are not adhered to profitability might experience a negative trend this suggest the crucial nature of budget and budgetary control in facilitating the achievement of profitability. This research work is carried out to investigate the relationship between budgetary control and organizations’ profitability and the adoption of unique budgetary control techniques in manufacturing companies in Nigeria. A survey research design method was adopted within six manufacturing companies selected randomly. Primary data was used and analyzed using correlation analysis, under the Statistical Package for Social Sciences (SPSS). The result shows that there is a positive relationship between budgetary control and profitability. It also shows that manufacturing companies adopt unique budgetary control technique. On the basis of the findings, we conclude that effective and efficient budgetary control techniques enhance profitability of manufacturing companies in Nigeria. The work recommends that; in order for manufacturing companies to increase profitability so as to remain relevant in the open market management must adhere to budgetary control and take corrective actions in areas where there are variances.
INTRODUCTION
................. To remain relevant in the open market firms need to improve their sales turnover and profitability. It is very important for manufacturing companies to put into view the necessity of preparing effective budgets and establishing adequate budgetary controls in ensuring increase in their profitability. No planning system can be successful without having an effective and efficient system of control. Budgeting is closely related to control. The exercise of control in the organisation with the help of budgets is known as budgetary control (Pandey, 1995).
An enterprise should be managed effectively and efficiently. Managing implies coordination and control of the total enterprise efforts to achieve the organisational objectives. The process of managing is facilitated when management charts its course of action in advance. The function of management also includes decision making facilitated by various managerial techniques, procedures and by utilizing the individual and group effort in a rational way. One systematic approach for attaining effective management performance is budgeting and budgetary control (Pandey, 1995).
A budget is a plan expressed in quantitative and money terms (CIMA). Budgets need to be prepared and approved in advance of the period in which they are to be used. Budgets can include some or all of income, expenditure, and the capital to be employed. Moreover, a budget can be drawn up for an entire organization, any segment of the organization such as a department or sales territory or division, or for a significant activity such as the production and sale of a specific product.
Once financial goals are established, the budget is used to check and control operations using a budgetary control system. A budgetary control system is a system for comparing actual results with budgeted goals. Variations between actual results are investigated and analysed. Action is taken to correct these variations while the operations continue. The budgetary control system covers all phases of business activity; production, sales, administration and finance Horace and Herrington (1998). ...............
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CHAPTER ONE: INTRODUCTION
1.1 Background to the Study
1.2 Statement of the Problem
1.3 Purpose of the Study
1.4 Research Question
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scope of the Study
1.8 Limitation of the Study
1.9 Definitions of Term
1.10 Organisation of the Study
References
CHAPTER TWO: LITERATURE REVIEW
2.1 Introduction
2.2 Concepts of Budgets
2.2.1 Functional budgets
2.2.2 Master budgets
2.2.2:1 Cash budget
2.2.2:2 Sales Budgets
2.2.2:3 Production Budgets
2.2.2:4 Direct Material Budget
2.2.2:5 Direct Labour Budget
2.2.2.6 Manufacturing Overhead Budget
2.2.2:7 Selling and Administration Expenditure Budget
2.2.2:8 Capital Expenditure Budget
2.2.3 Types of budgets
2.2.3:1 On the basis of type of expenditure
2.2.3:2 On the basis of level of activity
2.2.4 Alternative approach to Budgets
2.2.4:1 Incremental Budgeting
2.2.4:2 Zero Based Budgeting (ZBB)
2.2.4:3 Activities Based Budgeting
2.2.4:4 Program Planning and Budget System
2.2.5 Functions of Budget
2.2.6 Essentials of Budgeting
2.2.7 The Budget Administration
2.2.7:1 Budget Committee
2.2.7:2 Budget Manual
2.3 Budgetary Control
2.3.1 Importance of Budgetary Control
2.3.2 Objective of Budgetary Control
2.3.3 Budgeting Process
2.3.4 Benefits of Budget and Budgetary Control
2.3.5 Problems of Budgeting and Budgetary Control
2.3.6 Pre-requisites for Budgetary Control Technique
2.3.7 Impact of Budgetary Control System
2.3.8 Limitations of Budgetary Control System
2.3.9 Behavioural Aspects of Budgeting and Budgetary Control
2.4 Budgetary Control and Profitability
2.4.1 Effects of Budget on Profitability
References
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Population of the Study
3.4 Sample Size and Sampling Technique
3.5 Source of Data
3.5.1 Instrument for Data Collection
3.5.2 Description of Questionnaire
3.5.3 Validity and Reliability of Instruments
3.5.4 Administration of Instrument
3.6 Actual Field Work
3.7 Method of Data Analysis and Presentation
3.7.1 Correlation
References
CHAPTER FOUR: DATA ANALYSIS AND PRESENTATION
4.1 Introductions
4.2 Data Presentation
4.3 Data Analysis: section A
4.4 Data Analysis: Section B and C
4.5 Interpretation of hypothesis
4.5.1 Hypothesis one
4.5.2 Hypotheses two
References
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction
5.2 Summary of Work Done
5.3 Summaries of Findings
5.4 Conclusions
5.5 Recommendations
5.6 Suggestions for Further Study
Bibliography
Reference code: c016
Reference code: c016
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103 Pages
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