Author
Listed:
- Akinleye Gideon Tayo
(Department of Accounting, Ekiti State University. Ado Ekiti. Ekiti State)
- Fakorede Oluwatosin Mary
(Department of Accounting, Ekiti State University. Ado Ekiti. Ekiti State)
Abstract
This study investigated the effect of material and overhead costs on the profitability of consumer goods firms in Nigeria over a ten-year period (2014–2023). The study analyzed secondary data from ten chosen organizations using a fixed-effect model and panel data regression, using return on assets (ROA) as a metric for profitability. The findings indicate that material and overhead costs have a substantial positive influence on the profitability of manufacturing companies in Nigeria. Specifically, a 67.3% rise in ROA is linked to a 1% increase in overhead cost, while a 5.3% gain in profitability seems to be associated with a 1% increase in material cost. The model’s R-squared value of 0.629 indicates that the firm size, material costs, and overhead costs account for almost 63% of the variation in ROA. The results highlight how crucial efficient cost control is to improving the sector’s financial performance. The positive correlation between costs and profitability may suggest that businesses can maximize earnings in spite of economic constraints by strategically controlling overhead and material expenses and using them efficiently. In light of these findings, the study recommends that managers implement stringent cost controls, particularly for material and overhead expenses, to maintain consistent earnings.
Suggested Citation
Akinleye Gideon Tayo & Fakorede Oluwatosin Mary, 2025.
"The Effect of Overhead Costs and Material Costs on Profitability of Consumer Goods Firms in Nigeria,"
International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(6), pages 2296-2307, June.
Handle:
RePEc:bcp:journl:v:9:y:2025:issue-6:p:2296-2307
Download full text from publisher
Corrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bcp:journl:v:9:y:2025:issue-6:p:2296-2307. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
We have no bibliographic references for this item. You can help adding them by using this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Dr. Pawan Verma (email available below). General contact details of provider: https://rsisinternational.org/journals/ijriss/ .
Please note that corrections may take a couple of weeks to filter through
the various RePEc services.