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    Cost Reduction and Control Technique

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    Bishnu S. Mukherjee
    Cost control aims to reduce inefficiencies and wastage by setting predetermined costs and standards, selecting metrics to measure actual performance against targets, analyzing variances and their causes, and taking corrective actions. It requires firms to have clear responsibility centers, set proper standards, collect accurate cost data, generate reports to alert management, and reward good performance. The advantages of effective cost control include achieving expected returns, improving resource productivity, creating jobs, and optimizing limited production resources.

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    Cost Reduction and Control Technique

    Uploaded by

    Bishnu S. Mukherjee
    26 views9 pages
    Cost control aims to reduce inefficiencies and wastage by setting predetermined costs and standards, selecting metrics to measure actual performance against targets, analyzing variances and their causes, and taking corrective actions. It requires firms to have clear responsibility centers, set proper standards, collect accurate cost data, generate reports to alert management, and reward good performance. The advantages of effective cost control include achieving expected returns, improving resource productivity, creating jobs, and optimizing limited production resources.

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    25704284-cost-reduction-and-control-technique

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    Cost control aims to reduce inefficiencies and wastage by setting predetermined costs and standards, selecting metrics to measure actual performance against targets, analyzing variances and their causes, and taking corrective actions. It requires firms to have clear responsibility centers, set proper standards, collect accurate cost data, generate reports to alert management, and reward good performance. The advantages of effective cost control include achieving expected returns, improving resource productivity, creating jobs, and optimizing limited production resources.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    26 views9 pages

    Cost Reduction and Control Technique

    Uploaded by

    Bishnu S. Mukherjee
    Cost control aims to reduce inefficiencies and wastage by setting predetermined costs and standards, selecting metrics to measure actual performance against targets, analyzing variances and their causes, and taking corrective actions. It requires firms to have clear responsibility centers, set proper standards, collect accurate cost data, generate reports to alert management, and reward good performance. The advantages of effective cost control include achieving expected returns, improving resource productivity, creating jobs, and optimizing limited production resources.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 9

    Cost Control

    and
    Cost Reduction
    Topics:
     Meaning of Cost Control
     Elements of Cost Control Scheme
     Essentials for success of Cost
    Control
     Advantages of Cost Control
    Definition:

    -The Chartered Institute of Management


    Accountants, London defines Cost
    Control as:

    “The regulation by executive action of the


    cost of operating an undertaking
    particularly where such action is guided
    by cost accounting.”
     Cost Control aims at reducing
    inefficiencies and wastages and
    setting up predetermined costs and
    in achieving them.
    Elements of Cost Control Scheme:
     Set down a standard/ target.
     Select a yardstick.
     Ascertain the actual performance.
     Compare the actual performance.
     Analyze the variances by causes.
     Take corrective action.
     Periodically review the standards.
    Essentials for success of Cost
    Control:
    Firm should have definite plan of
    organisation.
    Costs should be collected for each
    of responsibility.
    Report should draw management’s
    attention.
    Good performance should be
    rewarded.
    Proper setting of standards.
    Advantages of Cost Control:
    Achieving the expected return of
    capital
    Increase in productivity of the
    available resources
    Job opportunity
    Economic use of limited resources
    of production

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