DETERMINANTES OF COST MANAGEMENT PERFORMANCE: THE CASES OF AWASH WINE SHARE COMPANY

Abstract

The aim of this thesis is to evaluate the effectiveness of cost management practices in controlling and reducing manufacturing costs at Awash Wine Share Company. This research looks at how Awash Wine share company’s production costs were reduced and controlled by the application of cost management techniques. The research design was used descriptively with qualitative and quantitative approach. Using Watson formula, there are survey sample selections of participants were responded 240 valid questionnaires in company. Data analysed and presented with descriptive statistics such as frequencies, percentages, mean and standard deviation through statistical tool SPSS. To examine the cost management practices, it was focused on cost control and reduction methods and procedures including management support, employee involvement, accounting responsibility, standard costing, product quality control, and target costing production organizations. The analysis ranked the cost management practices for cost reducing and cost control in the Awash Wine S.C Relative Importance Index (RII). The respondents' perceived criticality of the traits was used to score them using the Relative Importance Index. The findings of the study shed light on factors influencing cost management practices and cost control, as revealed by a measurement tool distributed across all departments of the company. Based on these insights, the following recommendations were proposed: management should actively lead and support cost management practices to effectively manage production costs. Additionally, departmental managers should establish and communicate standard costs and budgets clearly to ensure all staff understand their roles and contributions towards achieving organizational goals. Furthermore, employee engagement and comprehension of cost standards are identified as crucial performance indicators for enhancing operational success and efficiency.