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University of Khartoum
Problems of Process Costing in Some Major Industries in Sudan.
Faculty
Faculty of Economic and Social Studies
Degree
M. Sc.
URN
uofketd-agr1983001
Year
1983
By
Ibrahim Ali Eisa
Supervisor
C.L. Tyagi
In their constant activities, businesses which are engaged in the manufacture
and sales of products-consumer or industrial encounter various problems with
the concepts and application of costing. The sources of these problems can
ultimately be traced to specific dimensions of costing systems, techniques
procedures and methods. Because the accumulation of costing is governed by
the costing system adopted or installed, it is quite important to explore the
problems encountered by industries whose accumulation of costs is accorded
by one of these systems and which is more applicable to the majority of
industries in Sudan.As far as costing systems are concerned, the majority of
industries in Sudan are processing industries where process costing is the
costing system that most of these industries can resort to. It needs not be
questioned that the processing industries in Sudan have their own problems.
Apart from the fact that most of these problems are not exclusive to the
processing industries, there are presumably particular problems that are
peculiar to the process costing and which their specification is the reason for
this thesis.The purpose of this thesis is to identify the problems of process
costing system presently installed is some major industries in Sudan. That is, to
identify from the point of view of process costing system the costing problems
encountered by the major processing industries in Sudan and suggest suitable
solutions to the kind of problems specified by the work.In dealing with such
kinds of problems it is necessary that the facts used are those obtained from
within the practical fields of work, and for this personal visits to some major
processing industries have been made. Interviews and discussions with the cost
accountants and sometimes other employees in these industries have been
held with specific questions in mind. The questions have been designed to have
information on organization structures, number of products manufactured,
processes and materials used, cost elements and classifications, pricing
policies, costing techniques and procedures and other areas. A visit has also
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been made to the Ministry of Industry since it is the part directly involved into the
costing maters in all the industries.Throughout this thesis, only qualitative facts
are used and all the interviews and discussions made aim at explaining how the
system works and specifying the problems encountered. It worth mentioning
that the response to the interviews differs from industry to industry, and only in
few of them could there be a good response. The lack of response to the
interviews is mainly due to the fact that in those industries and factories there is
a feeling that there is no information to be given and in some factories they even
answer that they have no costing sections. Others think that their data and
information are very secret and still others refuse because as they say, they are
very busy. However, the industries covered can quite suffice the purpose of this
study and for more clarification of how the system works; two industries are
given in more details as samples of the major processing industries.This thesis
lies in four Chapters: Chapter I is an introduction, and it deals with the possible
problems associated with process costing from the theoretical point of view. It
gives a broad perspective for the definitions and concepts of cost and the
related problems which have impacts on process costing, as well as other areas
of process costing, cost allocation and cost apportionment.Chapter II is about
the characteristics of and the challenges to the major industries in Sudan. It
gives a general survey into the common difficulties and problems faced by the
processing industries and determine the impacts of such difficulties and
problems on process costing system employed. Two of the processing
industries have been surveyed here in more detail given as specimens of the
major processing industries in Sudan.Chapter III is a specification of the various
problems within the processing industries and whether such problems are
exclusive to process costing system or, merely challenges to the manufacturing
activities in general and can constitute certain obstacles to the installation of
process costing system.Chapter IV is the summary and conclusions of the
thesis where recommendations suggested by the findings of the work are given
at the end of the chapter.
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