This document discusses cost control and cost reduction. It defines cost control as comparing actual costs to budgets and standards to regulate costs, while cost reduction refers to permanently lowering production costs. The main areas of cost control are labor, materials, sales, and overhead. Advantages of cost control include improved profitability and competitiveness, while disadvantages include reduced flexibility. Advantages of cost reduction are increased profits and lower consumer prices, while quality may be sacrificed. Techniques for cost control include budgetary control and variance analysis, while techniques for cost reduction include work study, value analysis, and materials control.

1. Presented By:-
• SIRAJ KHAN
• JAY MALVIYA
• HARSHIT CHOURASIYA
• GIRDHARI NAGAR
• MAYANK MULCHANDANI
Cost Control & Cost Reduction

2. What do you mean by Cost
Control &
Cost Reduction ???

3. COST CONTROL
Cost Control involves a comparison of actual with the
standards or budgets, to regulate the actual costs.
Planning
Appraisal Decision-Making
Communication Motivation
* Steps

4. Main Areas of Cost Control
Labour
Materials Sales
Overhead/FC Energy

5. COST REDUCTION
 Cost Reduction is the achievement of real and
permanent reduction in unit cost of products
manufactured.
 Cost Reduction refers to bringing
down the cost of production

7. ADVANTAGES OF COST CONTROL
It helps the firm to improve its profitability and competitiveness.
It helps the firm in reducing its costs and thus reduce its prices.
It is indispensable for achieving greater productivity.
If the price of the product is stable and reasonable, it can maintain
higher sales and thus employment of work force.

8. DISADVANTAGES OF COST CONTROL
Reduces the flexibility and process
improvement in a company.
Restriction on innovation.
Requirement of skillful personnel to set
standards.

9. ADVANTAGES OF COST REDUCTON
 Cost reduction increases profit..
 Provide more money for labor welfare
schemes and thus improve men.
 Goods available to the consumers at cheaper
rates.
 It helpful in meeting competition effectively.

10. DISADVANTAGES OF COST REDUCTON
 Quality may be sacrificed.
 There may be a conflict between
individual objective and organizational
objective.
 Cost may not be real and permanent.

11. TECHNIQUES OF COST CONTROL
Budgetary control
Standard costing
Inventory control
Ratio analysis
Variance analysis

12. TECHNIQUES OF COST REDUCTON
Organization and methods
Work study
Material handling
Automation
Value analysis
Variety reduction
Production control
Design
Materials control
Quality control