Table of Contents
Abstract 2
CHAPTER ONE.. 5
INTRODUCTION.. 5
1.1 Background to the Study. 5
1.2 Statement of the Problem.. 6
1.3 Objectives of the Study. 7
1.4 Research Questions. 8
1.5 Research Hypothesis. 8
1.6 Significance of the Study. 9
1.7 Scope of the Study. 9
1.8 Limitations of the Study. 10
1.9 Organization of the Study. 10
1.10 Definition of Terms. 11
REFERENCES. 13
CHAPTER TWO.. 15
REVIEW OF RELATED LITERATURE.. 15
2.1 Introduction. 15
2.2 Theoretical Review.. 15
2.2.1 Activity-Based Costing (ABC) Theory. 15
2.2.2 Economic Order Quantity (EOQ) Theory. 16
2.2.3 Transaction Cost Economics (TCE) Theory. 16
2.2.4 Institutional Theory. 16
2.3 Conceptual Review.. 17
2.3.1 Overview of Overhead Costing Practices. 17
2.3.2 Importance of Overhead Costing Practices. 17
2.3.3 Challenges and Dynamics in the Nigerian Broadcasting Sector 18
2.3.4 Theoretical Perspectives on Overhead Costing. 18
2.3.5 Strategic Implications of Overhead Cost Management 18
2.3.6 Institutional Factors and Overhead Costing Practices. 19
2.3.7 Technological Innovations and Overhead Cost Efficiency. 19
2.3.8 Case Studies and Practical Insights. 19
2.3.9 Regulatory Compliance and Financial Sustainability. 20
2.4 Empirical Review.. 20
2.5 Summary of Chapters. 22
Chapter Three. 23
Research Methodology. 23
3.1 Introduction. 23
3.2 Research Design. 23
3.3 Population of the Study. 23
3.4 Sample Size and Sampling Technique. 24
3.5 Data Collection Methods. 24
3.6 Instrument for Data Analysis. 25
3.7 Validity and Reliability of Instruments. 25
3.8 Ethical Considerations. 26
3.9 Limitations of the Methodology. 26
3.10 Conclusion. 27
CHAPTER FOUR.. 28
DATA ANALYSIS AND INTERPRETATION.. 28
4.1 Preamble. 28
4.2 Socio-Demographic Characteristics of Respondents. 28
TABLES BASED ON RESEARCH QUESTIONS.. 32
4.3 Analysis of the Respondents’ Views on Research Question one: 32
4.4 Testing Hypothesis. 42
4.5 Discussion of Findings. 44
CHAPTER FIVE.. 48
SUMMARY CONCLUSION AND RECOMMENDATIONS. 48
5.1 Summary. 48
5.2 Conclusion. 49
5.3 Recommendations. 50
REFERENCES. 52
RESEARCH QUESTIONNAIRE.. 56
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
In the dynamic landscape of broadcasting in Nigeria, understanding overhead costing practices is pivotal for assessing the profitability and sustainability of media enterprises. Overhead costs, encompassing expenses not directly attributable to production but crucial for operational continuity, present a significant challenge and opportunity for broadcasting companies in this region. Effective management of overheads not only impacts financial performance but also influences strategic decision-making and market competitiveness.
The broadcasting sector in Nigeria has experienced rapid growth and transformation, characterized by technological advancements and evolving consumer preferences. This evolution necessitates a comprehensive examination of overhead costing practices within the industry. By scrutinizing the allocation and management of overheads, stakeholders can gain insights into cost efficiency, resource allocation, and ultimately, profitability. This study seeks to explore these dynamics through a focused analysis grounded in empirical evidence and industry insights.
Key factors influencing overhead costing practices in Nigerian broadcasting companies include regulatory frameworks, technological investments, content production costs, and operational scale. Regulatory requirements, such as licensing fees and compliance standards, impose direct financial burdens that shape overhead structures. Moreover, investments in digital infrastructure and broadcasting equipment represent substantial capital expenditures that impact cost structures over the long term (Adeniyi, 2019; Adebisi & Adegbite, 2021).
The profitability of broadcasting companies in Nigeria hinges on the effective management of overhead costs amidst competitive pressures and market uncertainties. Profit margins are directly influenced by overhead-to-revenue ratios, operational efficiency, and revenue diversification strategies. Understanding these interdependencies is crucial for executives, policymakers, and investors aiming to navigate the complexities of the Nigerian broadcasting landscape (Olaniyan et al., 2020; Yusuf & Olajide, 2022).Top of Form
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1.2 Statement of the Problem
The profitability of broadcasting companies in Nigeria is increasingly scrutinized amidst challenges related to overhead costing practices. While the sector has witnessed significant growth and technological advancement, there remains a critical gap in understanding how overhead costs impact financial performance. Specifically, there is a lack of comprehensive empirical studies that explore the specific components of overhead costs, such as regulatory compliance, technological investments, and operational efficiencies, and their direct influence on profitability (Adeniyi, 2019; Adebisi & Adegbite, 2021). This gap hinders stakeholders' ability to formulate informed strategies for optimizing cost structures and enhancing profitability in an increasingly competitive broadcasting environment.
The dynamic regulatory landscape in Nigeria further complicates overhead costing practices for broadcasting companies. Regulatory requirements, including licensing fees, content regulations, and compliance standards, impose direct financial burdens that vary across companies and impact profitability differently. Understanding how these regulatory demands interact with operational overheads is crucial for mitigating risks and identifying opportunities for cost optimization (Olaniyan et al., 2020; Yusuf & Olajide, 2022). Moreover, technological investments in broadcasting equipment and infrastructure represent substantial capital outlays that require careful management to balance operational efficiency with cost containment strategies.Top of Form
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1.3 Objectives of the Study
The main objective of the study is to examine Overhead costing practices and profitability of broadcasting companies in Nigeria. Specific objectives of the study are:
- To assess the current overhead costing practices employed by broadcasting companies in Nigeria and their impact on overall cost management and profitability.
- To identify the specific overhead cost drivers within the Nigerian broadcasting industry and analyze their correlation with profitability levels.
- To evaluate the effectiveness of existing overhead costing systems in supporting decision-making and performance management within Nigerian broadcasting companies.
1.4 Research Questions
To guide the study and achieve the objectives of the study, the following research questions were formulated:
- What are the predominant overhead costing methods utilized by broadcasting companies in Nigeria, and how do these methods influence cost allocation and profitability measurement?
- How do variations in overhead cost structures and allocation bases among Nigerian broadcasting companies affect their overall profitability and competitive advantage?
- To what extent do the current overhead costing practices in Nigerian broadcasting companies provide accurate and relevant information for cost control, performance evaluation, and strategic decision-making?
1.5 Research Hypothesis
The following research hypothesis was developed and tested for the study:
Ho: There is no significant relationship between overhead costing practices and profitability of broadcasting companies in Nigeria.
1.6 Significance of the Study
The study is important for many reasons. The following are the major stakeholders this paper through its practical and theoretical implications and findings will be of great significance:
Firstly, the paper will benefit major stakeholders and policy makers in the Accountancy sector. The various analysis, findings and discussions outlined in this paper will serve as a guide in enabling major positive changes in the industry and sub-sectors.
Secondly, the paper is also beneficial to the organizations used for the research. Since first hand data was gotten and analysed from the organization, they stand a chance to benefit directly from the findings of the study in respect to their various organizations. These findings will fast track growth and enable productivity in the organisations used as a case study.
Finally, the paper will serve as a guide to other researchers willing to research further into the subject matter. Through the conclusions, limitations and gaps identified in the subject matter, other student and independent researchers can have a well laid foundation to conduct further studies.
1.7 Scope of the Study
The study is delimited to AIT Port-Harcourt. Findings and recommendations from the study reflects the views and opinions of respondents sampled in the area. It may not reflect the entire picture in the population.
1.8 Limitations of the Study
The major limitations of the research study are time, financial constraints and delays from respondents. The researcher had difficulties combining lectures with field work. Financial constraints in form of getting adequate funds and sponsors to print questionnaires, hold Focus group discussions and logistics was recorded. Finally, respondents were a bit reluctant in filling questionnaires and submitting them on time. This delayed the project work a bit.
1.9 Organization of the Study
The study is made up of five (5) Chapters. Chapter one of the study gives a general introduction to the subject matter, background to the problem as well as a detailed problem statement of the research. This chapter also sets the objectives of the paper in motion detailing out the significance and scope of the paper.
Chapter Two of the paper entails the review of related literature with regards to corporate governance and integrated reporting. This chapter outlines the conceptual reviews, theoretical reviews and empirical reviews of the study.
Chapter Three centers on the methodologies applied in the study. A more detailed explanation of the research design, population of the study, sample size and technique, data collection method and analysis is discussed in this chapter.
Chapter Four highlights data analysis and interpretation giving the readers a thorough room for the discussion of the practical and theoretical implications of data analyzed in the study.
Chapter Five outlines the findings, conclusions and recommendations of the study. Based on objectives set out, the researcher concludes the paper by answering all research questions set out in the study.
1.10 Definition of Terms
1. Overhead Costs
These are ongoing operational expenses of a business that are not directly attributable to creating a product or service but are necessary for its operations. In broadcasting, this includes costs like rent, utilities, administrative salaries, etc.
2. Cost Allocation
This refers to the process of assigning indirect costs to specific cost objects (such as programs or departments) based on a reasonable allocation method. In broadcasting, it ensures that overhead costs are fairly distributed across various functions.
3. Profitability Analysis
This involves assessing the financial performance of a broadcasting company to determine how efficiently it is generating profit relative to its overhead costs and other expenses. It helps in identifying profitable segments or areas needing improvement.
4. Activity-Based Costing (ABC)
ABC is a method of assigning overhead costs to products or services based on the activities that drive those costs. In broadcasting, it could involve allocating costs based on the specific activities like production, transmission, or content creation.
5. Economies of Scale
This concept suggests that as broadcasting companies grow and increase their output, they can spread their overhead costs over a larger base, potentially lowering the cost per unit and improving profitability.
6. Break-Even Analysis
This analysis helps determine the level of revenue a broadcasting company needs to cover its total costs (including both variable and fixed overhead costs) and break even. It's crucial for understanding financial stability and planning profitability.
7. Cost Control
This involves monitoring and reducing unnecessary overhead costs without sacrificing quality or operational efficiency. Effective cost control in broadcasting ensures that expenses are managed to maximize profitability and sustainability.
