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Cost Control is a process used in order to control and reduce the costs and expenses borne by the companies. It involves various aspects of management including planning, motivation, decision-making, communication and appraisal. Internal and external standards are established to control costs in the company. Cost Control Assignment Help tells us about many advantages and control techniques of cost control. Various control techniques include- budgetary control, labour control, overhead control, capital expenditure control, etc. Students looking for various notes on cost control can refer Cost Control Assignment Help.
Advantages, Limitations and Control Techniques of Cost Control
There are numerous advantages of cost control. Some of the important advantages of cost control highlighted in Cost Control Assignment Help are given below
• Cost control creates a significant opportunity for business by reducing its repair and maintenance costs.
• It is the foundation for creating budgets and thus helps the company to achieve its intended profit.
• It increases the overall profit of a company and hence the wages of employees also increases.
• With the help of cost control techniques, the productivity also increases.
• Management uses cost control to increase the credit worthiness of the company.
• It helps the firm to improve its performance.
• Other advantages of cost control include- improves competitive advantage, increases budgets for advertising and marketing, defines key performance indicators, etc.
Along with advantages, cost control also has some disadvantages. Listed below are some limitations of cost control
• Mismanagement in controlling costs can often lead to several problems.
• One of its disadvantages lies in the bookkeeping system.
The various types of control techniques or cost control methods discussed in Cost Control Assignment Help are as follows
• Labour Control- Direct labours are directly engaged in the production of goods and services while indirect labours are not directly engaged in the production process. Labour control is a cost control technique that aims at the control of the costs due to labour. The labour control department comprises of pay roll, personnel, cost accounting, time-keeping and engineering department.
• Budgetary Control- It aims at setting up budgets and to centralise the control system. One of the prime objectives of budgetary control is to maximize the profits of the organization. It sets a common goal for each and every department of the organization.
• Overhead Control-Various steps included in it are- controlling sales costs, decreasing transportation expenses, implementing total quality management and decreasing working capital. Overhead cost controlling is divided into cost centre accounting, cost element accounting and activity-based accounting.
• Standard Costing- It is used to evaluate performance of the organization. It also guides the management in functions like production policies, formulation of prices, etc.
• Control of Capital Expenditure- This control technique is used to control projects of various departments. Techniques involved in it include- capital budgeting, planned development, continuous search for new products, progress record, etc. To know more about other techniques, please refer Cost Control Assignment Help.
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