Controlling costs and budgets

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Controlling costs and budgets:

By: Ma. Louisa A. Noguerra Controlling costs and budgets

What is the difference between cost and budgets?:

What is the difference between cost and budgets? COST is the total expenses of the company
in their operation. Like doing a certain project or projects. Example: Labor, Materials, Supplies
BUDGET refers to the fund allotted for the operation or certain projects.

Accounting records:

Accounting records

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CONCEPT Effective cost control begins with accurate records of costs as they occur and an
understanding of the accounting reports that document them.
Which comes first: cost control or cost reduction?:

Which comes first: cost control or cost reduction? Cost Control comes first. It is because in the
life of a supervisor, keeping the cost in line with established cost standards is a big pressure.
After setting-up the cost standards, it is followed by calls to reduce(improve) existing costs. The
cost improvement is often used to soften the implication of the real objective: Cost Reduction.

How important is recordkeeping to Cost Control?? :

How important is recordkeeping to Cost Control?? Records of the company needs to be up-to-
date for it is used as basis in controlling. And when you say CONTROL, it means keeping
within limits. If you dont know what the limits are (or holding costs within those limits) you
cant very well take any meaningful action.

What must you know about accounting?:

What must you know about accounting? There are three basic of costs: Unit Costs are costs,
partial or total, accumulates per unit of product or service processed or produced. Standard costs
- unit costs that have been set down as allowable costs for materials, for direct and indirect
labor, for manufacturing, for marketing, for administration, and the like. Budgeted costs costs
guidelines (target) issued to supervisors and managers by accountants at the beginning of the
accounting period.

Budgeted costs:

Budgeted costs