COST VOLUME PROFIT ANALYSIS AND PROFIT PLANNING IN MANUFACTURING SMEs IN NIGERIA
AbstractThe manufacturing SMEs encounters many problems, one of which is the inability to earn a sustainable profit for continuity. The inadequate profitability is one the factors responsible for the early death of SMEs in Sub Sahara Africa. This study examined the effect of cost volume profit analysis on profit planning in manufacturing SMEs as means to solve the problem. A cross sectional survey research design was adopted, and the study sample population from snowballing consisted of 50 manufacturing SMEs with 1048 senior staff. A questionnaire was used to elicit the respondents' opinions, and 714 useable copies of the survey were returned. Descriptive statistics, Pearson product-moment correlation, and Regression analysis methods were used for the data analysis. The study concluded that cost volume profit analysis has a positive and statistically significant impact on profit planning (β=.645, P=.00<.05). The study recommended that the management of manufacturing SMEs should employ and retain high-caliber accountants and restructure their management team for effectiveness. The decision-making process should be streamlined for planning efficiency, and top management should support the cost volume profit analysis model to aid adequate implementation and results.
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