Cost control
In one sentenceMonitoring actual costs and comparing them with the plan continuously, and taking quick action when they are exceeded, so they stay within the required limits.
Simply put
Control is not cutting costs at any price; it is knowing where your money goes and stepping in before the difference builds up.
It depends on three things: a clear standard or budget, quick periodic reports, and a named person responsible for each item.
Worked example
A factory set the packaging cost at 3 SAR per unit; in the month it produced 10,000 units and the packaging cost reached 34,000 SAR.
Allowed cost3 × 10,000 = 30,000 SAR
Actual cost34,000 SAR
Overrun that needs action34,000 − 30,000 = 4,000 SAR
Don't confuse it with
Variance analysisVariance analysis is one of the control tools that reveals the cause of the difference, while control also includes the corrective action.
in FullScreen ERP
Cost centers in the system show the profitability of each branch, project or department. General accounts