EFFECT OF COST CONTROL TECHNIQUES ON THE PERFORMANCE OF SMALL AND MEDIUM ENTERPRISES IN ONDO STATE, NIGERIA.

Abstract

The study was aimed at assessing the effect of cost control techniques on performance of Small and Medium Manufacturing Enterprises in Ondo State. The objectives of the study where: to evaluate the extent of adoption of budgetary control techniques by the Small and Medium Manufacturing Enterprises, to examine the factors influencing the cost control techniques used by the firms and to assess the effect of cost control techniques on performance of the Small and Medium Manufacturing Enterprises in the study area. A survey research design which involved structured questionnaire supplemented by oral interview was used and it had a population size of 1194 and a sample size of 386. Multi-Stage sampling procedure was used and the data collected was analyzed using tables, frequency and percentage distribution, mean rating and regression analysis, using SPSS 25. The findings of the study revealed that factors that significantly influence the cost control techniques used by the SMEs include the level of education of employees (p= 0.000), business experience (p= 0.000) and the length of time the firm has been running (p= 0.000); these factors have significant level on performance of the SMEs in the manufacturing sector and are significant at 5% level of significance. The regression analysis revealed that the cost control techniques included in the model accounted for 48.3% variation in the performance of the SMEs in the study area. The ANOVA table for the hypothesis revealed that a positive significant relationship (p < 0.05) exists between the cost control techniques and the performance of the firms in the study area. From the findings it was recommended that cost control techniques such as inventory control, standard costing and budgetary control should be adopted by all Small and Medium Manufacturing Enterprises in Ondo State. Conclusively it can be rightly stated based on the findings of this study that the cost control techniques ( budgetary control, standard costing and inventory control) has a positive effect on the performance of Small and Medium Manufacturing Enterprises in Ondo State