EFFECT OF ABSORPTION AND MARGINAL COSTING ON CORPORATE PERFORMANCE IN NIGERIA

Abstract

The study examined the effect of absorption and marginal cost on corporate performance in Nigeria, it specifically examined the effect of absorption costing on corporate performance of selected manufacturing firm in Nigeria and it also ascertained the significant influence of marginal costing on corporate performance of selected corporate performance in Nigeria. The population of the study consisted on twenty-one (22) manufacturing companies listed on the Nigeria exchange group, however, eighteen (18) samples were selected from the population. A total number of 540 were randomly sampled from the companies in the samples. Data were collected with the use of questionnaire. Collated data were analyzed using descriptive method of analysis. Specifically, the study made use of percentages and frequency analysis. Result revealed that to a large extent the absorption costing has significant and positive effect on corporate performance of the selected companies in Nigeria. Also, result reflected that there is evidence across the manufacturing that marginal costing has positive and significant relationship with corporate performance of selected manufacturing in Nigeria. This study therefore concluded that absorption and marginal costing has positive and significant effect on corporate performance of selected manufacturing companies in Nigeria. Hence, the study therefore, concluded that absorption and marginal costing have strong statistical relationship with the corporate performance of selected manufacturing companies in Nigeria. The study recommends that profitability, business size, liquidity situation, and asset tangibility are important variables to consider when the management of selected manufacturing firms in Nigeria decides to adopt absorption and marginal costing