Impact of Cost Control on Production Efficiency of Listed Consumer Goods Companies in Nigeria

ABSTRACT: The Nigerian consumer goods industry faces rising production costs, inflation, and intense competition, highlighting the need for effective cost management strategies. Cost control serves as a vital mechanism for monitoring expenditures, optimizing resources, and improving production efficiency. This study examines the impact of cost control mechanisms on production efficiency among listed consumer goods companies in Nigeria. Grounded in Contingency Theory and the Theory of Constraints (TOC), the research adopts a quantitative survey design. Structured questionnaires were distributed to finance and operations personnel across ten listed firms, with data analysed using descriptive statistics, Pearson correlation, and multiple regression analysis. Results reveal statistically significant positive relationships between production efficiency and cost control mechanisms: standard costing (r = 0.642, p < 0.01), budgetary control (r = 0.591, p < 0.01), variance analysis (r = 0.618, p < 0.01), and activity-based costing (r = 0.566, p < 0.01). Moderate inter-correlations among cost control variables indicate structural cohesion in cost management systems. The regression model explains 71.4% of the variance in production efficiency (R² = 0.714; Adjusted R² = 0.692) and is statistically significant (F(6, 93) = 32.56, p < 0.001). Each cost control practice significantly predicts production efficiency: standard costing (β = 0.384), budgetary control (β = 0.325), variance analysis (β = 0.318), and activity-based costing (β = 0.267). Control variables—firm size and inflation rate were insignificant. The findings affirm the strategic importance of internal cost control mechanisms in enhancing production efficiency, underscoring their superiority over macroeconomic factors in optimizing performance in resource-constrained settings.