THE IMPACT OF PRODUCTION BUDGET ON THE PERFORMANCE OF MANUFACTURING COMPANIES IN NIGERIA. A STUDY OF COCA-COLA BOTTLING COMPANY IN NIGERIA MAKURDI.

CHAPTER ONE 1.0 INTRODUCTION 1.1 Background to the Study For any organization to operate meaningfully there has to be clear direction of where it is leading to or what it is aiming to achieve, the standard of objective and means of monitoring derivatives from the required standard. These considerations can only be met through budgeting, planning as well as controlling (Muiruri, 2006). The production budget calculate the number of units of products that most be manufactured, and is derived from a combination of the sales forecast and the planned amount of finished goods inventory to have on hand (Usually) as safety stock to cover for unexpected increase in demand). The production budget is typically prepared for a “push” manufacturing system, as is used in a material requirements planning environment (kariuk, 2021). A budget identified the planned expenditure for a project, program, or portfolio. It is used as baseline against which the actual expenditure and predicted eventual cost of work can be reported. Once approval is given, these refined estimates form the base line cost. By allocating costs expenditure is produced. Budget and budgetary controls are essential tools for financial planning and control in any organization. Most organizations have realized that budgeting and budgetary controls are essential tools for successful financial planning. They are therefore paying sufficient attention to their annual budgets and allocation of resources to the key result area (Adeniji, 2006). A large number of enterprises fail to make a reasonable profit or generate sufficient funds at the right time due to the failure of management to plan ahead adequately. Every business, no matter how small, needs a budget to guide operations and the execution of project. A budget can be viewed as a device for informing management of the plans a divisional head had for the coming year so that management can appraise these plans in relation to what other divisional heads had planned and in relation to company policy. Osisioma, (2011) opined that budgeting is systematic and formalized approach for accomplishing the planning, co-ordination and control responsibilities of management. It is a process of preparing in advance of the period to which it relates a summary statement of plans expressed in quantitative terms, which if utilized with sophistication and good judgment would enhance the quantified in monetary terms, prepared and approved prior and/or expenditure to be incurred during that period, and the capital to be attain a given objective. 1.2 Statement of the Problem Every company has primary duty of achieving the objective of performance through budgeting with the comparison of performance. Due to the state of economy and government polices, the goal is much hindered during the period of economic utilization, high interest rate, shortage of foreign exchange. Further more, due to the economic problem, organization using production budget measure to check its cost often finds it very difficult to comply with the stipulated budget because the rising cost of doing business in the country has been of utmost concern to most business men and the entire citizens at large. This has even caused for capital flight and closure of some businesses and the movement of manufacturing companies to neigh boring countries managers may overestimate cots so that they will not be blamed in the future should they overspend. The use of production budget is needed to arrest the situation and this is what the objective aimed at achieving. 1.3 Objectives of the Study The main objective of the study is to study impact of production budget on the performance of manufacturing companies in Nigeria with reference to Coca Cola Bottling company, Makurdi. The specific objectives are i. To determine the impact of production budget on performance in manufacturing companies in Nigeria. ii. To assess the relationship between production budget and performance of manufacturing companies in Nigeria. iii. To recommend on and solution on the best way of production budget on performance in manufacturing companies in Nigeria. 1.4 Research Questions The following research question are drawn below on the above objectives; i. What is the impact of production budget on performance in manufacturing companies in Nigeria? ii. What relationship exists between production budget and performance of manufacturing companies in Nigeria? iii. What is the best way, production budget could be used as performance of manufacturing companies in Nigeria? 1.5 Significance of the Study The research work intends to help ascertain impact of production budget on the performance of manufacturing companies in Nigeria with reference to Coca Cola Bottling Company, Abuja. It will help management of this selected companies in assessing their performance planning and cost control. It will help the management to ascertain if it can reduce cost as well as maintain a high quality of their products and services through production budget. It is therefore envisaged that the out come of the finding will contribute tremendously to employee students and the general public on impact of production budget on the performance of manufacturing companies in Nigeria. Lastly, the work add to the existing literature to help future research interested in subject matter and as basis for further research. 1.6 Scope of the Study This study is aimed at finding out the evaluation of impact of production budget on the performance of manufacturing companies in Nigeria. This research is exclusively restricted to Coca Cola Bottling Company, Abuja. The study cover the period from 2016 to 2024. 1.7 Research Hypotheses This research work will be of great benefit to policy maker’s management of various organizations, auditors, shareholders and student researchers. The study will enable managers have an in-depth understanding of production budget on performance of manufacturing companies, if will also have the impact in taking investment decisions. 1.8 Limitation of the Study The major limitation of the study include; cost of carrying out the work and the short time span in which the work is supposed to be carried out. The researcher therefore has to source for additional funds from family and friends/relatives to carry out the work. The researcher also sacrifices his leisure time in order to carry out the research work. In case of my research I come to release that many companies does not have any form of intern relationship which make things difficult for getting information. 1.9 Definition of the Terms Budget: This is a plan quantified in a monetary term prepared and approved prior to a defined period of term usually showing planned income and expenditure during period. Budgeting: Budgeting is the process of creating a plan to spend your money. This spending plan is called budget. Impact: is defined as the action of one object coming forcibly into contact with another or a marked effect or influence. Manufacturing Company: this is a commercial business that converts raw materials or components into finished goods or products. Stock: This could be physical items or even cash that are being stored or kept in the storehouse. Stock Control: The economic arrangement for receipts and issues for balance of stock. Performance is a particular result obtained in management, economics, marketing, etc that print features of competitiveness, efficiency and effectiveness of the organization and its procedural and structural components. Planning: Planning (also called forethought) is the process of thing about and organizing the activities required to achieve a desired goal.