Cost control principles

Important Techniques of Cost Control 6.

Cost control principles

It is the amount denoted on invoices Cost control principles the price and recorded in bookkeeping records as an expense or asset cost basis. Opportunity costalso referred to as economic cost is the value of the best alternative that was not chosen in order to pursue the current endeavor—i.

It represents opportunities forgone. In theoretical economics, cost used without qualification often means opportunity cost. Externality and social cost When a transaction takes place, it typically involves both private costs and external costs.

Private costs are the costs that the buyer of a good or service pays the seller. External costs also called externalitiesin contrast, are the costs that people other than the buyer are forced to pay as a result of the transaction. The bearers of such costs can be either particular individuals or society at large.

Note that external costs are often both non-monetary and problematic to quantify for comparison with monetary values.

They include things like pollution, things that society will likely have to pay for in some way or at some time in the future, but that are not included in transaction prices.

Social costs are the sum of private costs and external costs.

BREAKING DOWN 'Cost Control'

For example, the manufacturing cost of a car i. The polluted waters or polluted air also created as part of the process of producing the car is an external cost borne by those who are affected by the pollution or who value unpolluted air or water.

Because the manufacturer does not pay for this external cost the cost of emitting undesirable waste into the commonsand does not include this cost in the price of the car a Kaldor-Hicks compensationthey are said to be external to the market pricing mechanism. The air pollution from driving the car is also an externality produced by the car user in the process of using his good.

The driver does not compensate for the environmental damage caused by using the car. This is done in both business and government. Costs are often underestimated, resulting in cost overrun during execution.

Cost-plus pricingis where the price equals cost plus a percentage of overhead or profit margin. Examples of manufacturing costs include raw materials costs and charges related to workers.

Manufacturing cost is divided into three broad categories:In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something or deliver a service, and hence is not available for use anymore.

In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as this case, money is the input that is gone in order to acquire the thing.

The Principles of Disease Elimination and Eradication. Walter R. Dowdle* The Dahlem Workshop discussed the hierarchy of possible public health interventions in dealing with infectious diseases, which were deflned as control, elimination of disease, elimination of infections, eradication, and extinction.

Cost control by management means a search for better and more economical ways of com­pleting each operation. Cost control is simply the prevention of waste within the existing environment. PRINCIPLES OF COST CONTROL cost than the other are plotted on the same graph but the camp cost is $50 per day.

The average total camp cost is the sum of the average daily cost of walking time plus the average daily cost of moving camp 4 3. Cost is important to all industry. Costs can be divided into two general classes; absolute costs and relative costs.

Absolute cost measures the loss in value of assets. Relative cost involves a comparison between the chosen course of action and the course of action that was rejected.

This cost of.

Cost control principles

Home» Courses» Finance & Accounting» The Essentials of Budgeting & Cost Control. A Budgeting Training Course. The Essentials of Budgeting & Cost Control Principles & Practices. Download PDF. 5 Days Training. Date Venue Fees(USD) Book your seat; 18 - 22 Nov But accurate Budgets depend on Cost Control and analysis.

It is essential.

Essentials of Budgeting & Cost Control Training