ABSTRACT

Specifically, the influence that cost accounting has on the performance of small and medium-sized firms in Cameroon was the subject of this study. In this study, the researchers sought to determine the impact of material costs on the performance of SMEs in Cameroon, as well as the impact of labor costs on the performance of small and medium-sized enterprises in Cameroon. They also sought to determine the impact of overhead costs on the performance of small and medium-sized enterprises in Cameroon, as well as the impact of expenses costs on the performance of SMEs in Cameroon.

Primary data were collected through the administration of a questionnaire, which was obtained directly from the field. Primary data are information obtained directly from the field through the administration of a questionnaire. The information was gathered through surveys with a sample size of 30 people. Statistical approaches used in the study included descriptive analysis and multiple regression procedures.

Our regression analysis gave findings for the statistical tests that were used to validate the results that we had submitted to the committee. In Cameroon, cost accounting factors explain 55.45 percent of the variation in SMSE performance, according to the results of the R-square analysis.

As a result, it is estimated that approximately 44.55percent of the variance is explained by factors other than those captured by the estimating framework described. Using F-statistics to measure overall goodness of fit, the findings revealed that the model’s fit is statistically significant at the 1, 5, and 10% levels of significance.

As a result, the findings reported above are trustworthy. It was suggested that there should be more collaboration or insourcing of cost accounting services in the future. Adhere to the Excel spreadsheet that has been created. A more collaborative relationship between the case firm and the external tax expert, as well as the outsourcing of cost accounting, can help to ensure accurate cost allocation. As e-commerce sales revenues grow, it becomes necessary to allocate sales revenues to specific products rather than just to the product category as a whole.

CHAPTERS ONE AND TWO

INTRODUCTION

1.1 The study’s historical context

Business environments in Cameroon have gotten increasingly dynamic and unpredictable over the past few decades; as a result, managing corporations has become increasingly difficult. In recent years, the SMEs sector has gained international recognition for its contribution to economic growth through a variety of means such as job creation, wealth generation, and poverty reduction (kitae, Gakure, & Munyao) (2012).

Businesses small and medium-sized are increasingly being recognized as powerful engines of economic empowerment and growth in most countries throughout the world (Islam, Khan, Obaidullah, and Alam) in the current global economy (2011). According to Muraguri (2010), small and medium-sized enterprises (SMEs) have long been recognized as making significant contributions to economic growth in both developed and developing countries.

SMEs are becoming more reliant on accounting information, according to Amoako (2013), who asserts that the quality of accounting information used inside these organizations has a positive association with the performance and longevity of the organization. In order for a company to successfully manage its finances, accurate cost accounting is a critical component of the process. It is possible that the lack of a cost accounting system or the use of an ineffective cost accounting system is the root cause of a company’s lack of success and earnings.

As a result, cost accounting is the process of gathering, analyzing, summarizing, and evaluating numerous possible courses of action and their costs and benefits. Its mission is to provide management with recommendations on the most cost-effective and capable course of action to take. Cost accounting, often known as management accounting, is a tool used by managers to collect data in an effort to enhance performance and make decisions.

Cost accounting is required by all firms, whether they are in the service, manufacturing, or trading industries, in order to track their activities. Because of the limitations of financial accounting, managers have come to appreciate the significance of cost accounting.

The following are some examples of how cost accounting serves a general function:

Cost accounting is beneficial during moments of trade depression and trade competition since an organization cannot afford to have losses that go unchecked during these periods. The management team must be aware of the areas in which cost savings can be achieved, waste can be removed, and efficiency can be raised. The organization must wage a struggle not merely to ensure its survival, but also to ensure that it continues to develop. Before commencing on any scheme of price fixation, managers should ascertain the true cost of their items in the marketplace. Estimation is made easier with the use of cost accounting- An accurate set of costs can be used to make estimates and quote tenders on a trustworthy basis.

As it becomes possible to know the cost of a product at every stage, it becomes possible to check for waste in the form of time and money, as well as in the shape of machine equipment and material. Cost accounting removes wastages.

When it comes to cost accounting, comparison is possible because adequate preservation of costing records gives a wide range of costing data for comparison, which in turn assists management in determining the best course of action for the future.

Profit and loss accounts are prepared at regular intervals using data from cost accounting records. Adequate costing records provide the management with as many data points as are required for the preparation of profit and loss accounts and balance sheets at the intervals that are desired by the management.

Cost accounting aids in the determination and improvement of efficiency.

Losses resulting from waste of materials, idle time of workers, inadequate supervision, and other factors will be revealed if the various processes involved in the manufacturing process are closely examined. Efficiency can be measured, costs can be regulated, and a variety of activities can be taken to improve efficiency. “

Inventory control is aided by cost accounting — cost accounting provides the control that management requires in regard to the stock of raw materials, work-in-progress, and finished goods.

Investors, banks, and other lending money institutions have a vested interest in the success of a company concern and, as a result, stand to gain significantly from the implementation of an effective costing system. They can use the cost records to get an opinion regarding the profitability and long-term prospects of the company.

Employees have a vested interest in the success of the firm in which they are employed by their employer. Their benefits are numerous when an efficient costing system is implemented in their organization. They profit from continued employment as well as increased remuneration through the use of incentives, bonus programs, and other means. There are four major difficulties that small and medium-sized enterprises (SMEs) must deal with: an unfavourable business environment, inadequate capital, a lack of management skills, and a lack of access to technology.

When you consider the significance of small and medium-sized enterprises (SMEs) in an economy, it seems quite realistic to investigate the elements that influence or hamper their performance, which is a critical aspect in their survival and growth. Cost accounting must be implemented and utilized properly in order for SMEs to enjoy growth and expansion. Because most firms are more concerned with the final result (profit or loss) than they are with the element of cost that is carefully monitored and controlled, accounting systems must be designed with great care. While these firms may lack the competence to implement complex accounting processes, the value of accounting systems to these organizations is substantial.

1.2 Formulation of the Problem

The private sector, which was formerly undervalued in Cameroon, is now being recognized as a key driver of the country’s economic development. Small and medium-sized firms (SMEs) account for the vast majority of private sector activity in most developing nations, and this is also true in Cameroon.

As a result, SMEs in Cameroon are driving the economy and alleviating poverty. It is well recognized that small and medium-sized enterprises (SMEs) are an effective tool for job creation, income generation, and economic growth, even in industrialized countries such as the United States and Europe; SMEs contributed significantly and significantly to the GDP.

However, despite the efforts of the government to ameliorate the situation of SMEs in Cameroon, the country continues to have a harsh business climate that limits the growth of local small businesses and provides limited opportunities for foreign investors to establish themselves in the country. According to Maduekwe (2015), small and medium-sized enterprises (SMEs) are thought to be failing in part because of a lack of efficient use of management accounting methods such as budgeting, performance management, and pricing tools.

According to Ahmad (2012), one of the reasons for business failure is a lack of managerial ability, which includes the inability to solve accounting problems. In order to understand how cost accounting can play a significant role in the growth of small and medium-sized enterprises, the researcher must examine the growth of large businesses that have highly skilled professional accountants who can manage and coordinate the entity’s resource management and coordination.

Small and medium-sized enterprises (SMEs) in Cameroon cover the entire range of economic activity across all sectors and share a number of common problems that prevent them from performing effectively. These problems include limited market access to credit, poor information flow, discriminatory legislation, limited access to land, weak linkages between different sectors, weak operating capabilities in terms of skills, lack of knowledge and attitudes, and a lack of infrastructural facilities, among other things.

Another issue that contributes to SMEs failing is a lack of managerial competence, which includes the ability to solve accounting problems. The availability of infrastructure facilities in the areas of access roads, electricity, water supply, and other areas is woefully inadequate, as is the multiplicity of policies and regulatory measures, such as the removal of fuel subsidies, the imposition of taxes, and the imposition of multiple charges on loans.

1.3 Main Question

What is the effect of cost accounting on the performance of small and medium-sized enterprises in Cameroon?

1.3.1 Specific questions

1. What is the effect of material cost on the performance of SMEs in Cameroon?
2. What is the effect of labour cost on the performance of SMEs in Cameroon?
3. What is the effect of overhead cost on the performance of SMEs in Cameroon?
4. What is the effect of expenses cost on the performance of SMEs in Cameroon?

3 Main objective

To examine  the effect of cost accounting on the performance of small and medium-sized enterprises in Cameroon?

1.3.1 Specific questions

1. To assess the effect of material cost on the performance of SMEs in Cameroon
2. To examine the effect of labour cost on the performance of SMEs in Cameroon
3. To look at the effect of overhead cost on the performance of SMEs in Cameroon
4. To identify the effect of expenses cost on the performance of SMEs in Cameroon