Advantages of Cost Control
Cost control provide basis for measuring operating performance: As standards are developed from the study of cost operations and existing conditions, they become a pointer to the weaker aspect of operation. The efficiency or inefficiency can be ascertained easily by comparing actual and standard costs
Standard costs provide easy comparability: Because of standards, cost control exercises influences all the factors of operation. Measurement, comparison, and evaluation of current performance become more effective.
Standard costing is basically an economic tool: It helps in cost reduction by putting effective check over inefficiency in operations and by eliminating undue paper work. It suggests standard cost accordingly
Standard costing is a basis for budgeting: Budgets are prepared on the basis of standard costs. Thus, budgeting and standard costing together provide effective control device and make managers cost conscious
At Eagle Business Advisors
We help businesses to:
- Design & implement the costing system in your business to generate data to calculate the cost of your products, services & processes
- Create control measures to cut down the costs with enhanced efficiency
- Build budgeting models that will suit your business needs