An investigation into the effectiveness of cost and management accounting practices in a manufacturing company: a case of National Pharmaceuticals

Abstract

The focal point of this research was to investigate into the “effectiveness of cost and management system in a pharmaceutical company” A case of National Pharmaceuticals. National Pharmaceuticals is one of the major players in the pharmaceutical sector in Zimbabwe. The company was manufacturing below capacity as a result of funding problems. The company opted to outsource the drugs as a cost reduction technique. Since it started outsourcing drugs, it began to experience a decline in reported profits from 2011 to 2013 due to high import costs charged on the drugs. A review of related literature was carried out to establish what renowned authors and scholars had to say concerning outsourcing as a cost control and management accounting tool in a pharmaceutical manufacturing company. The researcher also relied heavily on the internet during research to provide literature concerning the research under study. The major sources of related literature were internet journals, accounting text books and accounting package developers websites. Descriptive research design was used both questionnaires and interviews were implemented because of its cost and time effectiveness. The gathered data were presented using tables and pie charts to illustrate the research findings and responses gathered. This was facilitated with the help of the Likert Scale model. A summary, recommendations and conclusion were made on how to make the cost and management accounting system relevant and effective for the operations at National Pharmaceuticals and in generally in the modern day Zimbabwe,