The Effects of Cost on the Profitability of an Organization (A Case of Grand Cereals and Oil Mills Limited, Nigeria)

Abstract

The topic of this research is'The effects of cost on the profitability of an organization': (a case of Grand Cereals and Oil Mills Limited, Nigeria). The purpose of this study was to discover the relationship between cost and profitability in an organization, to identify the role of proper costing in the growth of an organization, to also identify the challenges of cost and profitability in an organization and to determine ways of reducing cost and maximizing profits in an organization. The design of this study was a cross-sectional survey method. The instrument of data collection was the records of Grand Cereals and Oil Mills Limited and it was analyzed using the Simple correlation as well as Analysis of Variance (ANOVA). The result of this research shows that there is a negative correlation between cost of production and profitability of Grand Cereals and Oil Mills Limited, there is positive correlation between sales and profitability and there is also a negative correlation between VAT and profitability of an organization. However, for adequate profit to be recorded from a business there is a need for adequate control of cost because a company with adequate cost structure possesses the higher chance of attaining its profit target.