CHAPTER THREE

RESEARCH METHODOLOGY
3.0 Introduction
This issue of effective cost accounting information in price determination in organization has

been a sensitive one both in the public and in the private sector. The sensitivity is more in the

public sector due to the fact that it affects the company in achieving their goals. It is in view of

this and the need for an exhaustive and accrual information both financial and qualitative terms

that the researcher adopted relevant research method to collect and analyze the available data.

This chapter decried the research design. Research population and samples: sources of data

instrument for data collection distribution and collection of questionnaire and the method of

data analysis.

3.1 Research Design

According to Asika (2000), research design in the structuring of investigation aimed at

identifying variable and their relationship to another. Research design is a scientific plan,

drawing or scheme identifying the functioning or working of the research process before it is

engaged in, Okezie (2002). This is used for the purpose of obtaining data to enable the

researcher to test the hypothesis or answer the research question. It is an outline that serves as

a guide to the researcher in his effort to generate data for the study. For the purpose of this

study survey research design which involves the use of research instrument i.e. questionnaire

which aims at gathering first-hand data will be chosen.

Chi-square method was chosen so as to know the relationship between the variable i.e. internal

control system and fraud, in the public service.

3.2 Study Population

This could be a group of persons, animals, companies etc. According to Nwoko and Olantian

(1988), Population of a study represents the target of the study as defined by the aims and

objectives of the study.

Also research population is an entire group of people, objects or events, all having at least one

characteristic in common, as stated by Jacob (1976). The population of this study will be the

staffs of Nigeria Bottling Company and it spread in these Departments:

Personnel/Administration

Accounts/Finance

Production/Purchasing

Marketing/Sales

The population consists of thirty (30) workers.

3.3 Source of Data

The sources of data include both primary and secondary sources. The primary data sources

adopted by the researcher include personal interview and questionnaire conducted in Nigerian

Bottling Company Plc.

Questions were put forward to the interview and their answers noted responses to questions put

forward in the questionnaire were articulated and a random sampling method was used in order

to ensure the representative and precision of the sample. The secondary data sources were text

book, magazines, newsletter and unpublished material which were used for the literature

review of chapter two.

3.4 Sampling and Sampling Techniques

The study started by researcher going through the available ready materials in the school

library, textbooks, journals, newspapers, blogs and questionnaires were collected, evaluated
and finally tabulated for analysis and interpretation. In other words, the study made use

secondary and primary data.

3.5 Data Collection Method

Both primary and secondary data were used to give the research work on empirical backing.

Primary Data: The primary data were collected from questionnaires. The type of

questionnaire that was used for this research project is close-ended and open-ended

questionnaire.

Secondary Data: The secondary data were gathered from materials such as journals, textbooks

etc.

3.6 Description of Data Collection Instrument

The data collection instrument to be used in this study will be questionnaire which will be

administered on the sample. The cover page of the questionnaire explains the purpose of the

study to the respondent and at the same time asks for their co-operation by completing the

questionnaire. The questionnaire is divided into two sections. The first section contains

questions about the respondents (bio-data) and other section contains questions on the subject

matter.

3.7 Re-Statement of Research Question

i. What effect does cost accounting information has on price determination

ii. Problem affecting price determination

iii. What are the relevant cost information

iv. What are the necessary tools for managerial decision making
3.7.1 Re Statement of Research Hypothesis

Hypothesis I

H0: Costing Information has no impact on price determination of Coca-Cola product

H1: Costing Information has impact on price determination of Coca-Cola product

Hypothesis II

H0: Pricing decision cannot be made without adequate information

H1: Pricing decision can be made without adequate information

Hypothesis III

H0: Costing information is not relevant in price determination

H1: Costing information is relevant in price determination

3.8 Data Analysis and Statistical Tools of Analysis

For the purpose of the study, descriptive non-parametric statistical techniques shall be adopted

the mean to be precise. LIKERT attitude of measuring scales shall be used. e.g. SA =

Strongly Agreed, A = Agreed, U = Undecided, D = Disagreed, SD = Strongly Disagreed. Chi-

square techniques is the method of analysis because it allows for easy determination of

variation that might occur by explaining effect of cost accounting information in price

determination. Chi-square (X2) test would be computed based on variation between observed

frequencies in the sample involved and expected frequencies according to some hypothesis.

The inferential tool used

- Chi-square X2 test

The descriptive tools to be used in

- Percentage
- Tables

The chi-squares test is performed by defining the numbers, categories and observing the

number of case falling into each category and knowing the expected number of fully in

each category,

The formulae for the chi-square is

OE
X 2 = ( )
E

Where: X2 = Chi-square
= Summation (sigma)
O = Observed frequency
E = Expected frequency

It will determine if the computed value of chi-square (X2) is large enough to require

rejection of the null hypothesis. The degree of freedom in the table has to be determined

and also the level of significance is determined.

The decision rule is rejected Ho if X2 calculate is greater than X2 critical value (Chi-square

table) and accept Ho if the compute is less than or equal to table (X2).

Where: H0: Null hypothesis

H1: Alternative hypothesis.
 CHAPTER FOUR

PRESENTATION OF DATA ANALYSIS

4.0 Introduction

The purpose of this chapter is to analysis the data in a systematic way so as to facilitate

verification and authority of propositions that were stated earlier on. Test of the propositions

will provide the much needed answers to the research questions and also form a basis of good

and reliable recommendations.

4.1 Analysis of Data

The responses to the questions in the questionnaire were analyzed firstly the expenses to the

bio-data questions were dealt with in part A before those questions in part B of the

questionnaire.

The tables below shows the respondents of the respondents to the sex, age, marital status, length

of service, educational background and current position distribution in the questionnaire. A

total of their [30] questionnaires were delay completed and returned.

Table 4.1: Sex of Respondents

No. of respondents % respondents

(frequency)

Male 21 70
Female 9 30
Total 30 100%
Source: Field Survey 2017

Table 4.1 above reveals that 70% of the respondents were male while 30% respondents were

female. This implies that majority of respondents were male.

Table 4.2: Age of Respondents

Variable No. of respondents % of respondents

(frequency)

20-25 years 16 48
26-35 YEARS 7 21
36 and above 10 31
Total 33 100%
Source: Field Survey 2017

Tables 4.2 above show age distribution were 48% of respondents were between 20-25 years,

31% were 36 years and above while 21% were between 26-35 years. This implies that the

respondents were matured enough to answer the questionnaire very well.

Table 4.3: Marital Status of Respondents

Variable No. of respondents % of respondents

(frequency)

Single 22 67
Married 8 33
Widowed - -
Divorced - -
Total 33 100%
Source: Field Survey 2017

According to the table above, 67% of the respondents were single, while 33% were married.

This implies that majority of respondents single.

Table 4.4: Educational Backgrounds

Variables No. of respondents % of respondents

(frequency)

ND/NCE 8 70
B.S.C/HND 16 48
 Master 3 9
Professional Qualification 6 19
Total 33 100%
Source: Field Survey 2017

The table above shows that 48% of the respondents were BSC/HND holders, 24% were

ND/NCE holder, 19% were professional qualification, while 9% were Master holders. This

implies that majority of respondents were highly educated.

Table 4.5: Year of Experience

Variables No. of respondents % of respondents

(frequency)

Below 1 years - -
1-5 years 18 55
6-10 years 10 30
11 years and years 5 15
Total 33 100%
Source: Field Survey 2017

The table above shows that, the respondents who served in the company for 1-5 years were

43% of the 88 respondents, those who had served for 6-10 years were 29%, 11-20 years were

18% and 21-35 were 32%. This shows that all respondents were experienced in the service.

4.2 Analysis of Research Questionnaire

Table 4.2.1: Your Company operate with standard costing

Variables Frequency Percentage

Strongly Agreed 17 52
Agreed 11 33
Undecided - -
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017
Table 4.2.1 above shows that 52% of respondents strongly agreed that their company with

standard costing, 33% agreed, while 15% disagreed. This implies that Nigeria Bottling Plc

operate with standard costing.

Table 4.2.2: There is an effective of internal control system in your company

Variables Frequency Percentage

Strongly Agreed 25 76
Agreed - -
Undecided - -
Disagreed 8 24
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.2 above show that there is an effective of internal control system in their company

were 76% of respondents strongly agreed, while 24% disagreed. This implies that there is

internal control system in their company.

Table 4.2.3: There is costing methods for price determination

Variables Frequency Percentage

Strongly Agreed 13 39
Agreed 15 46
Undecided 4 12
Disagreed 1 3
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.3 above show that there is costing methods for price determination were 46% of

respondents agreed, 39% strongly agreed, 12% undecided while 3% disagreed. This implies

that there cost method can be used for price determination.

Table 4.2.4: Costing accounting system can be used for adopted for unit pricing

Variables Frequency Percentage

Strongly Agreed 10 30
Agreed 15 46
Undecided 4 9
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.4 above shows that 46% of respondents agreed, 30% strongly agreed, 9% undecided

while 15% disagreed. This implies that cost accounting system can be used for unit per price

Table 4.2.5: There is inspection of materials before production

Variables Frequency Percentage

Strongly Agreed - -
Agreed 25 76
Undecided 8 24
Disagreed - -
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.5 above shows that there is inspection of materials before production. 76% of

respondents agreed, while 24% undecided. This indicates that there must be inspection of

materials before production.

Table 4.2.6: Proper cost accounting information gives the investor/shareholders confident

Variables Frequency Percentage

Strongly Agreed 13 39
Agreed 15 46
Undecided - -
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017
Table 4.2.6 above shows that 46% of respondents agreed, 39% strongly agreed, while 15%

disagreed. This implies that investor/shareholders rely on cost accounting information before

they invest.

Table 4.2.7: Efficient and Effective cost control is a major determinant for the

achievement of profit objectives of firms.

Variables Frequency Percentage

Strongly Agreed - -
Agreed 28 85
Undecided - -
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.7 above shows that 85% of respondents agreed, while 15% disagreed. This reveals

that efficient and effective cost control can be used as a major determinant for the achievement

of profit objectives of firms.

Table 4.2.8: Cost determination can be used for decision making.

Variables Frequency Percentage

Strongly Agreed 19 58
Agreed 7 21
Undecided 2 6
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.8 above shows that cost determination can be used for decision making were 58% of

respondents strongly agreed, 21% agreed, 15% disagreed while 6% undecided. This implies

cost determination has effect on decision making.

Table 4.2.9: An organization can use cost accounting for planning cost or control.
 Variables Frequency Percentage

Strongly Agreed 22 67
Agreed - -
Undecided 3 9
Disagreed 8 24
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Table 4.2.9 above show that 67% of respondents strongly agreed, 24% disagreed, while 9%

undecided. This implies that cost accounting can be sued for planning cost.

Table 4.2.10: Cost as an input to the pricing decision

Variables Frequency Percentage

Strongly Agreed - -
Agreed 18 55
Undecided 10 30
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

The table above shows that cost as an input to the pricing decision were 55% of respondents

agreed, 30% undecided, while 15% disagreed. This implies that cost can be used pricing

decision.

Table 4.2.11: Pricing decision cannot be made without adequate information

Variables Frequency Percentage

Strongly Agreed 21 64
Agreed 9 27
Undecided - -
Disagreed 3 9
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017
Table 4.2.11 above shows that 64% of respondents strongly agreed, 27% agreed while 9%

disagreed. This implies that for considering pricing decision adequate information must be put

in place.

Table 4.2.12: Cost information has impact on price determination of Coca-Cola product

Variables Frequency Percentage

Strongly Agreed 12 37
Agreed 9 27
Undecided 2 6
Disagreed 7 21
Strongly Disagreed 3 9
Total 33 100
Source: Field Survey 2017

Table 4.2.12 above shows that 37% of respondents strongly agreed, 27% agreed 21%

disagreed, 9& strongly disagreed while 6% undecided.

4.3 TESTING OF HYPOTHESIS

In the section, the formulated hypothesis for the purpose of this research will be tested, after

the test the decision can be made on whether to reject or accept the hypothesis. There are two

form of hypothesis, the null and alternative hypothesis. The hypothesis generated in this study

are tested using chi-square (one tailed test).

The expected and the observed frequency would be derived from the responses of the

respondent to the administered questionnaires.

Chi-Square formula for testing the above hypothesis is

2
2 = ( )

Where X2 = Chi-square
= Simutation
 Fo = Observed frequency
Fe = Expected frequency
To find degree of freedom
(C - 1) (R - 1)

Where C = number of column

R = number of rows
Significance 5% i.e. 0.03

Hypothesis I:

Ho: Cost information has no impact on price determination of Coca-Cola product

H1: Cost information has impact on price determination of Coca-Cola product

Table 4.2.13: Cost information has impact on price determination of Coca-Cola product

Variables Frequency Percentage

Strongly Agreed 12 37
Agreed 9 27
Undecided 2 6
Disagreed 7 21
Strongly Disagreed 3 9
Total 33 100
Source: Field Survey 2017

Variable Fo Fe Fo-Fe (Fo-Fe)2 2

( )

Strongly Agreed 12 6.6 5.4 29.16 4.4
Agreed 9 6.6 2.4 5.76 0.8
Undecided 2 6.6 -4.6 21.16 3.2
Disagreed 7 6.6 0.4 0.16 0.02
Strongly Disagreed 3 6.6 -3.6 12.96 1.9
Total 33 10.32

2
2 = ( ) = 10.32

The Value of calculated chi-square = 10.32
Degree of freedom

(C - 1) (R - 1)

(5 - 1) (2 - 1)

N = (4) (1) = 4
Level of Significance 0.05
Tabulated X2 = 9.488

Decision
Since the calculated value of X2 (10.32) is greater than the tabulated value (9.480), we reject

Ho and therefore concluded that Cost information has impact on Price determination of Coca-

Cola product.

Hypothesis II

Ho: Pricing decision cannot be made without adequate information

H1: Pricing decision can be made without adequate information

Table 4.2.14: Pricing decision cannot be made without adequate information

Variables Frequency Percentage

Strongly Agreed 21 64
Agreed 9 27
Undecided - -
Disagreed 3 9
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017

Variable Fo Fe Fo-Fe (Fo-Fe)2 2

( )

Strongly Agreed 21 6.6 14.4 207.36 31.4
Agreed 9 6.6 2.4 5.76 0.8
Undecided - 6.6 - - -
Disagreed 3 6.6 3.6 12.96 1.9
 Strongly Disagreed - 6.6 - - -
Total 33 6.6 34.1

2
2 = ( ) = 34.1

The Value of calculated chi-square = 10.32

Degree of freedom

(C - 1) (R - 1)

(5 - 1) (2 - 1)

N = (4) (1) = 4
Level of Significance 0.05
Tabulated X2 = 9.488

Decision
Since the calculated value of X2 (34.1) is greater than the tabulated value (9.480), we reject H1

and therefore concluded that Pricing decision cannot be made without adequate information.

Hypothesis III

Ho: Costing information is not relevant in price determination

H1: Costing information is relevant in price determination

Table: 4.2.14

Variables Frequency Percentage

Strongly Agreed 13 39
Agreed 15 46
Undecided - -
Disagreed 5 15
Strongly Disagreed - -
Total 33 100
Source: Field Survey 2017
 Variable Fo Fe Fo-Fe (Fo-Fe)2 2
( )

Strongly Agreed 13 6.6 6.4 40.96 4.2
Agreed 15 6.6 8.4 70.56 10.6
Undecided - 6.6 - - -
Disagreed 5 6.6 1.6 2.56 6.5
Strongly Disagreed - 6.6 - - -
Total 33 6.6 21.3

2
2 = ( ) = 21.3

The Value of calculated chi-square = 21.3

Degree of freedom

(C - 1) (R - 1)

(5 - 1) (2 - 1)

N = (4) (1) = 4
Level of Significance 0.05
Tabulated X2 = 9.488

Decision
Since the calculated value of X2 (21.3) is greater than the tabulated value (9.480), we reject H1

and therefore concluded that costing information is relevant in price determination.

 CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1 Summary of the Findings

This study was carried out on the effect of cost accounting information price determination.

This study was divided into five chapters. Chapter one based on introduction, Chapter tow;

literature review, Chapter three; research methodology; Chapter four; data presentation while

Chapter five; summary, conclusion and recommendation. This study was reveal that there is

effect of cost accounting information in price determination which was shown in hypothesis 1;

that cost information has impact on price determination of Coca-Cola product. Hypothesis II

reveals that pricing decision cannot be made without adequate information. While Hypothesis

III was also tested and concluded that costing information is relevant in price determination.

5.2 Conclusion

The essence of cost accounting information came to mind when one realizes that in the modern

world of industrialization that no firm can survive without properly costing its products and

any firm that does not know its information as regards costs, stands the chance of pricing itself

out of the market. The greatest weapon, which a firm can use against its opponents to maximize

efficiency, is proper costing. Ever if price ceiling exists, the firm will still in a position to

maximize its profits that is, reduction in cost without equivalent reduction in price leads to

increase profit.

The more costs are minimized based on information gained, the higher the profit will be and

this is a position increase in government tax hence dissuade the use of the market watch

department as the pricing guide to some manufacturing industries especially the beer industry

in which case study is not exempted.

Management accounting researchers have long considered the impact that a business costing

system has on the way pricing decisions are reached. This study has been conducted to explore

this relationship within the context of the tourism and hospitality industries, with the aim of

comparing evidence from these industries to the existing literature. The proposition held in the

literature was that the selection of pricing information differed between small and large tourism

business, with smaller businesses preferring variable costs plus market information and larger

businesses preferring both fixed and variable costs (Pellinen, 2003). Concepts of pricing

objectives and systematic costing systems have also been included in the study to integrate

multiple strands of pricing and costing research.

The results of the study partially support the proposition that the size of a business influences

the importance placed on the types of pricing information. Although the data tentatively shows

cost information more preferred by larger businesses and market information more preferred

by smaller businesses, no statistically significant correlations are identified. Across the sample

full costs are considered with higher importance when compared to variable costs, customers

and competitors in terms of both information and pricing method. The use of cost-plus pricing

is not universal, with some businesses changing pricing methods when modifying the prices of

existing products and services. Two motives, ensuring short-term survival and maximizing

customer perceptions, are decisions. The complexity of a business costing system did not have

strong associations with the selection of pricing information, methods or objectives, but several

weak correlations are found between the costing system and both methods and objectives. The

study suggests that costs remain a major factor for pricing decisions by tourism businesses.

5.3 Recommendation

This study contributes to the literature and appraisal of the role of accounting in pricing

determination that integrates knowledge from multiple disciplines. A suggested avenue of

further research includes evaluating performance indicators of a business to discover whether

the type of pricing processes and costing systems used has a significant effect on the outcomes

of the business, expanding the scope of the research conducted by Jobber & Hooley (1987). A

limitation of the study is the low response rate rendering the data insufficient for parametric

analysis.

To address this limitation, it is recommended that further research employing surveys consider

procedure outlined by Dillman (1978) to improve the validity of generalizing findings to a

greater populated.

Limitations to consider with the study include the narrow context of the study include the

narrow context of the study only covering tourism businesses, the limited number of objectives

covered by the research instrument, and the approximation of a business costing system by the

instrument as opposed to explicitly identifying the system being employed.

 SECTION A

BIO DATA

1. Sex: (a) Male ( ) (b) Female ( )

2. Marital Status: (a) Single ( ) (b) Married ( ) (c) Divorce ( )

3. Age: (a) 20-25 years ( ) (b) 26-30 years ( ) (c) 31-35 years ( ) (d) 35 years and

above ( ).

4. Educational Qualification: (a) OND/NCE ( ) (b) HND/BSC ( ) (c)Master ( )

(d) Professional Qualification ( )

5. Years of Experience: (a) Below 1 year ( ) (b) 1-5 years ( ) (c) 6-10 years ( )

(d) 11 years and above ( ).

SECTION B

GENERATING OF QUESTIONNAIRE ACCORDING TO THE RESEARCH

QUESTIONS

S/N ITEMS STRONGLY AGREED UNDECIDED DISAGREED STRONG

AGREED DISAGREED
1 Is your company operating
with standard costing?
2 How effective is the internal
control system of the firm?
3 There is costing methods for
price determination.
4 Cost accounting system can
be used for adopted for unit
pricing.
5 Overhead/labour cost effects
on product prices.
6 There is inspection of
materials before production.
7 Proper cost accounting
information give the
investors/shareholders
confident.
8 Efficient and effective cost
control is a major determinant
for the achievement of profit
objective of firms.
9 For decision making purpose,
the accountants classification
of direct and indirect cost is
not very useful.
10 An indirect cost may be
variable and out of pocket
expenses or a fixed cost.
11 The natural classification can
be divided into direct and
indirect labour.
12 Cost determination can be
used for decision making.
13 An organization can use cost
accounting for planning cost
or control.
14 Cost as an input to the pricing
decision.
15 The cost accounting
information helps government
in the area of tax collector.
16 Cost information has effect on
price determination.
17 Pricing decision cannot be
made without adequate
information.
18 Costing information is
relevant in price
determination.