EFFECT OF INDIRECT COSTS ON CORPORATE PROFITABILITY OF BREWERIES IN AFRICAN: EVIDENCE FROM NIGERIA.
Keywords:
Indirect Costs, Corporate Profitability, Breweries, Nigeria, AfricaAbstract
This study investigated the effect of indirect costs on corporate profitability of breweries in Nigeria. Specifically the study seeks to find the extent to which factory electricity generation, product promotion, general expenses and cost of advertisement affects profitability of breweries in Nigeria. In carrying out the study, ex-post facto research design involving secondary data collected from the annual statements of the two companies was used. The data collected from the secondary source were analyzed using descriptive statistics and multiple regression analytical method. Analysis of variance (ANOVA) and Durbin-Watson statistical analytical method were also used for the analysis of the variables. At the end of the study, the analysis reveals that there is a significant relationship between the profit of the companies and indirect costs. The implication of the findings is that indirect costs affect the profitability of the companies, suggesting that the companies should properly manage their costs in order to reduce the extent of expenditures on them so as to increase profit. Based on the findings of the study, it was recommended that Brewery companies whether local or multinational should consciously formulate policies geared towards effective cost control in view of its impact on profitability and secondly that financial managers should pay attention to the management of each component of indirect costs as the adverse effect on one could negate the positive effect on the other components.References
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