Cost Control

 

Cost Control 

Cost Control can be defined as the comparative analysis of actual costs with appropriate standards of budgets to facilitate performance evaluation and formulation of corrective measures. It aims at accomplishing conformity between actual result and standards or budgets. Cost control is keeping expenditures within prescribed limits.

Features of Cost Control

Creation of responsibility centers with defined authority and responsibility for cost incurrence.

Formulation of standards and budgets that incorporate objectives and goals to be achieved

Formulation of corrective measures to eliminate and reduce unfavorable variances.

A systematic and fair plan or motivation to encourage workers to accomplish budgetary goals.