Cost Control
Control is function that make sure that actual work is done to fulfill the original intention. It is a widely accepted notion that the actual costs for each cost element should be within the budget. Like hospitality and entertainment, expenses in a marketing department should not exceed the budget allowed for that head for the given period. Cost control is thought of as a managerial effort to attain cost goals within a particular environment.
Cost control is not a specific program. Rather, it is a routine activity to be frequently carried out. Cost must be controlled, otherwise, there will be wastage, misappropriation and embezzlement. Checking such wastage and misappropriation of resources is a continuous activity. A firm exercising a better control last year does not mean that it has now been relaxed from the cost control function. Cost control relies heavily on accounting techniques. Some of the key cost control techniques are responsibility accounting control system, standard costing, budgetary control and cost management ratios.
Therefore, cost control includes the routine management of the organizational activities, such as controlling of wastage, misappropriation, loss of work time, set up time etc.
