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Cost control is operated through setting standards of targets and comparing actualperformance therewith, with a view to identify deviations from standards or norms andtaking corrective action in order to ensure that future performance conforms to standardsor norms.Cost reduction is a continuous process of critical cost examination, analysis andchallenge of standards. Each aspect of business viz., products, process, procedures,methods, organization, personnel, etc. is critically examined and reviewed with a view ofimproving efficiency and effectiveness and reducing the costs.Cost control lacks the dynamic approach which planned cost reduction demands. In costreduction, standards which are the basis of control are constantly challenged forimprovement.
Cost Control is Controlling how much is spent on a certain item or project.. Anything above a certain amount needs approval of a higher authority. E.g. You are allowed to hire anybody up to a salary of $X.
Cost Reduction: Reducing the existing costs of items or services or salaries. E.g. You must reduce everybody's salary by5% Implementation:
Cost control is implemented by informing relevant parties of their spending allocation and approved level, and requiring approval on all expenditures. Those who go over their allocation are disciplined.
Cost reduction is implemented as a one-time directive.Cost control is implemented by calling departmental heads on their spending and also be mindfull of the way you allocate fund.
1. Focus Cost control focuses on the minimization of wastage than the reduction of cost. Cost reduction focuses on minimization of cost through new production process, improved plant layout, scientific material handling etc. 2. Basis Of Application Cost control is routinely applied on a continuous basis. Cost reduction is applied when an opportunity for cost reduction is identified which offers a competitive advantage for a longer time. 3. Use Of Accounting Techniques Cost control heavily relies on accounting techniques. Cost reduction may not involve the use of accounting technique.
2. The cost control represents the efforts where cost reduction represents achievement. Cost reduction is a continuous attempt towards improvement.
3. Cost Control implies that cost should not exceed the budgeted or standard limits. If it exceeds, investigation is necessary. Cost reduction means waste reduction, expenses reduction and increased production.
4. The process of cost control is to set a target ascertain actual performance and compare it with the target, investigate the variances and take remedial measures. Cost reduction is not concerned with maintenance of performance according to the standards.
cost control is to try to avoid unneeded costs but cost reduction is to try to find a way to reduce necessary costs
in my mind cost control is something where we manage and monitor the cost to make sure they do not grow beyond the projected amount.
and Cost reduction is a method whereby costs are reduced from the projected amount.. i hope this satisfies your query.
Cost control is an effort to LIMIT the growth of costs.
Cost reduction is an initiative taken with the goal to REDUCE business costs from a current level to a desired lower level.
1) Cost control is an procedure to restrict the cost to the accepted/approved limits..
2) Cost reduction is a situation where the expense has been reduced comparatively..
Cost Control is a part of the cost reduction process...
The cost control represents the efforts where cost reduction represents achievement. Cost reduction is a continuous attempt towards improvement.
The cost reduction is an adjustment or review action of budget & plan of a ongoing project and the cost control is a pre plan budgetary action of a project. But both actions aim is cost minimization of any project.
Cost Control is using money within a constrained budget, and cost reduction is using money but reducing spending useually only spent on things that are neccessities.
