CHAPTER ONE
INTRODUCTION
1.1 Background of Study
The reality of modern business management in a free enterprise economic system is the level of competition among all the enterprise, where only the fittest enterprises survive. The measure objective of every organization is profit maximization. This could be achieved through? The involvement of costing methods that should assist in decision making of make buy. These in turn require an improvement in the quality of decision. Therefore in order to respond effectively to the challenges of time, management requires good factors in business decisions. The research work is a real attempt to investigate into the principle and practice of marginal costing as an essential tool for decision-making in Manufacturing Companies using Anambra Motor Manufacturing Company (ANAMMCO) as a case study. The study will critically examine the following: – The condition for analyzing cost into fixed and variable components. – How the cost are normally controlled, – And how management decision in aided under the technique. An appraisal is necessary in order to determine effectiveness and efficiency of the management accounting technique. In carrying out this research work, data was got from questionnaire.
Information and analysis of the data, using the percentage method to analyze the response elicited from respondents. Also the personal observation methods were used, together with relevant information from libraries. Against the background of rapid economic growth, the Federal Military Government in 1975 was faced with the enormous task of developing the country’s infrastructure from one geared toward peasant farming to one oriented towards mechanized agriculture and industry. The Anambra Motor Manufacturing Company is the result of the economic and technological co-operation between the government and the people of Nigeria and DAIMLER-BENZ AG OF West Germany. The company is located at Emene Industrial layout, Enugu. The site covers an area measuring over 300,000 square meters generously leased by the state government. 1.2 Statement of Problem In this study we are to answer the questions listed below: a. When management is faced with two or more alternative choices of product, is marginal costing a useful tool for selecting or choosing the best alternative? b. With this techniques applied in costing, can production not be increased hence increasing the amount of fixed cost in the production?
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