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

1. COST CONTROLAND 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