APPLICATION OF MARGINAL COSTING TECHNIQUES IN MANAGEMENT

DECISION MAKING IN NESTLE FOOD PLC

This research work was undertaken to assess  the concept and application of marginal
costing techniques in management decision making reference to Nestle Food Plc. This
work was intended to achieve the following objectives:  Showing the importance of
marginal costing as a tool for planning and short term decision making and to
ascertaining the format to be used on presenting marginal costing information by
management  accountants to the management. Relevant data were collected from both
primary and secondary sources. Questionnaire was the main primary data collected
instrument employed while data from various relevant publications constituted the
sources of secondary data. Upon the analysis of data the (SPSS) along with percentage
mean item was used to analyze the questionnaires while ANOVA was used to test the
hypothesis. The study established that the marginal costing technique is the key aspects
of the Accountant’s job. The management Accountant ascertain whether the technique
contributes to high quality decision making which will help him in reporting on magical
casting techniques to Nigerian Nestle Food Plc, and the extent to which reliance can be
placed on the technique. The overall objective of any organization is to maximize profit
and hence increase in wealth of its shareholders. Based on the finding and conclusion
arrived, it recommend that practicing management accountant should identify relevant
cost and provide information to management on the effect of costs and revenues of
charges in volume of output in the short run and Fixed cost should not be absorbed into
product cost along with variable cost rather they should be treat as period cost which are
simply charged to profit with fixed selling and administrative cost during that period by
the management.
Purpose of the study

1. Showing the importance of marginal costing as a tool for planning and short term
decision making.
2. Ascertaining the format to be used on presenting marginal costing information by
management Accountants to the management.
3. Evaluating the extent to which marginal costing can be used for pricing method.
4. Examining whether marginal costing has helped the management to achieve high
profitability level.
5. Ascertaining the relevant costs to be used in marginal costing computation

Limitation of the study

This study could have been extended to cover as many companies in order to allow for
more representations but due to time and financial constraints this study will be limited to
the activities for Nestle Food Plc.