Cost Control: Definitions and Methods
Alejandro Madotta Accounting Supervisor II at Apache Corporation The cost of making a particular product or delivering a particular service is calculated by the finance and accounting department, with the help of a technique that is termed as Cost Accounting. The principle of cost accounting is very simple. The total cost of manufacturing a set or lot of goods or services is added up together and divided by the number of unites that have been produced, which gives the per unit production cost. Cost Accounting also reveals the unneeded expenditures that are titled as 'overheads'. The accounting department also derives some financial statements that give us a specified amount of overheads that are incurred. Also read more on cost control techniques and cost control strategies.
Cost Control Definition
There is no exact rule or definition of cost control. The term, cost control, implies the usage of policies and internal rules that help you to reduce the cost of a particular management process. Cost control methods target the reduction of cost, and maintenance of quality and quantity of a particular production process or service generation.
Cost Control Methods
Any business or corporation has to encounter difficulties, which are practical, financial as well as technical. The ones that survive these difficulties live to tell their stories of success. The following are some simple successful cost control methods.
Review and Modify Business Model: There is a great, economically and commercially successful business model, that is used to lay down the foundations of any company. The business model must be however subject to small and big changes. It means as a manager, you should subject the business model to changes according to your competitors actions and markets status. By the term change, I also mean that you should be upgrading and improving all possible business operations. You need to come up with new...
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