Cost control is of utmost importance in every business concern,
the negligence of which will affect the earning at any point in time. In
controlling costs, wastage is eliminated during the course of production and
even during the administrative, selling and distribution activities. A good
system of cost control begins with the behavior of workers in the organization
as workers are instrumental to the achievement of organizational goals. In
carrying out this research, budget was considered as the basic tool for
achieving effective cost control and the study was concentrated on Nigerian
Eagle flour mill Ltd, where cost control was viewed from a strategic
perspective. Chi-square model was used in analyzing the data and the hypotheses
tested confirmed positive impact of cost control on production cost in
1.0 INTRODUCTION TO
COST: cost is defined by Chartered Institute of Management
Accountants (CIMA), as the amount of expenditure incurred on, or attributable
to a specified thing or activity.
It can also be referred to as the expenses incurred, in the
course of a business, so as to bring products and services to its present state
or site. As the expenditure incurred, in an organization is monitored or
controlled, the end-effect is that the income of the organization will be
maximized (i.e growing positively) and when the reverse is the case, the
company might be suffering from substantial loss incurred in its operations.
main goal for setting up a business or manufacturing company is to be able to
make profit or better still for the benefit obtainable from an operation to
justify the cost incurred.
manufacturers are now willing to accept as a principle, that costing is of
value, there is still a considerable lack of appreciation by many of them as to
where its value lies.
In order to
achieve this main goal, company may differ from one to another, due to the fact
that organization operate from different scope and principles. The general
method is the application of cost control on production costing so as to minimize
cost and maximize profit in the course of production.
with particular attention to manufacturing organization cannot be over
emphasized for such organization to achieve its primary aim and objective.
is a broad set of cost accounting methods and management techniques with the
common goal of improving business cost efficiency by reducing cost, or at least
restricting their rate of growth.
control advocate believe that strategic cost-cutting must be planned carefully,
as not all cost reduction technique yield the same benefit.
therefore becomes an inheritable and indispensable tool in an organization for
a positive result to be realized Needless to mention that there are certain
cost that can not be monitored or controlled to a certain degree. Examples are
light and heat, rent and interest on loan etc.