The implementation of a detailed costing system : a case study relating to the meat processing industry

Abstract

The study was carried out in one of Malta's leading meat processing firms. The dissertation focuses on one of the main products, enabling the formulation of a set of objectives and ensuring consistency throughout the research. Product costing was identified as a critical concept due to the constant increase in meat imports thus rendering unstable raw material costs. It also considers a number of options and opportunities, in terms of raw material purchases, not yet recognised by management. The study also entails a thorough analysis of labour and overheads and how these product cost elements might affect total production cost. The research attempts to determine the impact of possible future price increases within the market and how these uncontrollable factors might affect the product costing mechanism. Through a series of semi-structured interviews with management, an analysis between the firm's current product costing system and the proposed system was carried out where the main problem areas within the industry were highlighted. From these comparisons the research extracts a number of possible scenarios ensuing in a set of recommendations which might eventually result in the implementation of a detailed costing system.