Cost control and cost reduction techniques

Meaning and steps involved in cost control and cost reduction and the difference between cost control and cost reduction.

1. COST CONTROL AND COST REDUCTION - DEEPTHI SOUBHAGYA AKSHATHA

2. Cost Control is defined as the regulation by executive action of the costs of operating an undertaking, particularly where such action is guided by cost accounting . Cost Control

3. PLANNING COMMUNICATION MOTIVATION APPRAISAL AND REPORTING DECISION MAKING STEPS INVOLED IN COST CONTROL

4. Purchase better equipment Reduce repair and maintenance costs Increase Budget for marketing and advertising Improves competitive advantages ADVANTAGES COST CONTROL

5. Cost Reduction is the achievement of the real and permanent reduction in the unit cost of goods manufactured or services rendered without impairing their suitability for the use intended or diminution in the quality of the product . cost reduction

6. AUTOMATION PRODUCTIVITY EFFCIENCY OUTSOURCING WASTE QUALITY CONTROL RELIABLITY STEPS INVOLVED IN COST REDUCTION

7. Cost reduction will increase profit Cost reduction will help in labour welfare Cost reduction will help to get goods at cheaper price Cost reduction will increase the productivity ADVANTAGES OF COST REDUCTION

8. Cost Control Cost Reduction (a) Cost Control represents efforts made towards achieving target or goal. (a) Cost reduction represents the achievement in reduction of cost (b) The process of cost control is to set up a target, ascertain the actual performance and compare it with the target, Investigate the variances, and take remedial measures. (b) Cost reduction is not concern with maintenance of performance according to standard Differences between Cost Control and Cost Reduction.

9. (c) Cost control assumes the existence of standards or norms which are not challenged (c) Cost reduction assumes the existence of concealed potential savings in standards or norms which are therefore subjected to a constant challenge with a view to improvement by bringing out savings d) Cost Control is a preventive function. Costs are optimized before they are incurred (d) Cost reduction is a corrective function. It operates even when an efficient cost control system exists. There is room for reduction in the achieved costs under controlled conditions (e) Cost control lacks dynamic approach (e) Cost reduction is a continuous process of analysis by various methods of all the factors affecting costs, efforts and functions in an organization. The main stress is upon the why of a thing and the aim is to have continual economy in costs