Effects of Standard Costing on the Profitability of Telecommunication Companies

Abstract

The paper is aimed at examining the effects of standard costing on the profitability of MTN telecommunication companies to discovering if the application of standard costing techniques have any effect on profitability, to explore the relationship between standard costing and the profitability of telecommunication companies and determining whether standard costing techniques and principles are being adopted and practiced by Nigerian MTN telecommunication company. The design of this paper is descriptive survey method and the paper was conducted at MTN company, kano which is the case study of this paper work. The instrument of data collection was analyzed using the chi-square method. The following were discovered findings shows that  accounting records are kept and are significantly necessary in the management of the company. That the company employs standard costing in their product and decisions are made with the standard costing information obtained in the company. That accounting reports are prepared and presented to the company’s management and that actions are taken promptly on the information given in the report. That effective application of standard costing has effect on the profitability of the company. That the company benefit in a significant way through the use of standard costing especially in the improvement of profit. We came to a conclusion that standard costing is widely used in Nigerian telecommunication companies and that standard costing enhances adequate planning, control and decision making processes in the company. That standard costing aids telecommunication companies in the elimination of unprofitable products, provision of costing information and cost control.

Keywords: telecommunication, standard costing, profitability, cost control, accounting