Thus, cost control follows a canada conservative procedure and lacks a dynamic approach whereas cost reduction is dynamic and innovative in cost nature.
(iii) If the standards are outdated, loose, inaccurate and unreliable, they are more harmful.If you can really do thisif you really know what it is that doesn't add value to the customerthen you can start asking 'How can we get free rid of that?' Otherwise, we are just saying 'Let's cut costs.".For example, HTC Sweden, a global flooring systems company whose diamond grinding machines turn ordinary concrete floors into luminous work surfaces, has used "digital prototyping" to cut product development costs by approximately.(vi) Standard costing may be found flash to be unsuitable and costly cost reduction in the case of firms dealing in non-standard products.(iii) It provides the management the basic information to fix selling price, transfer pricing, etc.Similarly, parts reduction efforts have to work hard to remove the clutter (excess part variety) in the system, whereas zero-based approaches exclude the clutter from the beginning."Only the most exceptional leaders of the most exceptional companies avoid getting sucked into a period of heady growth followed safe by desperate cutbacks Alan Mitchell wrote.Applicability: Cost control is generally applicable to items of costs which have standards where as cost reduction is applicable to every activity of the business.Aim: Cost control aims at achieving the predetermined costs, whereas cost reduction aims at reduction of costs by finding new ways or methods to have continuous economy on costs.Only a limited number of grades, types and sizes of the product are retained.It is a supplementary device in addition control to the conventional cost reduction methods. Upcoming SlideShare, loading in 5, like this presentation?
Its basis lies cost in identifying differences between actual and budgeted costs, finding the reasons behind these discrepancies, and then implementing actions to correct each discrepancy.
Being cost able to order larger quantities of standard parts and materials provides purchasing leverage where buyers can benefit reduction from suppliers economies-of-scale and arrange more frequent deliveries, to support just-in-time operations.
Is corrective in nature, has a larger scope than cost control.Cost reduction is not concerned with maintenance of performance according to employment predetermined targets.The preparation of budgets and control reports, and the canada insurance resulting analysis of variances application from performance standards, give managers an idea of where to focus their attention to achieve cost reductions."Over time, you get a cost cutting culture consultant Paul Taffinder reduction told Mitchell.The next stage in the application development of automated controls was the use of analogue computers.Control reports need to provide an adequate amount of information so that management may determine the reasons for any cost variances from the original insurance budget.Benefits Increased productivity and operational efficiency application Reduced control manufacturing costs Improved work place layout Better manpower planning and capacity planning fair wages to employees Better working conditions to employees improved work flow Reduced material handling costs provides a standard of performance to measure labour efficiency Better.Budgeting is thus only a part of the budgetary control Characteristics (a)Establishment of budget for each cost function/department of the organisation recipe (b)comparison of actual performance with the budgets on a continuous basis (c)Analysis of variation of actual performance from that the budgeted performance to know the.A generic term for those techniques, particularly method study and work measurement, which reduction are used in the examination of human work in all its contexts, aquarium and which lead systematically to the investigation of all the factors which affect the efficiency and economy of the situation.It is a machine designed to process electronic signals.42.Through the budget process and accounting controls, management establishes overall company objectives, defines the centers of responsibility, determines specific objectives for each responsibility center, and designs procedures and standards for reporting and evaluation. This leaves the task of purchasing slightly sidetracked.
(12) Quality Control Quality Control refers to all those functions or activities that must be performed to fill the company's Quality objectives.
Merit Rating is the comparative appraisal of individual reduction merits of an employee.
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