【 Weak current college 】 cost effective control

Cost management is the management and administration of any necessary work undertaken by the means of achieving the lowest cost predetermined quantity and quality. Whereas the application of cost control refers to the various methods of cost accounting, mainly due to cost limits, according to limit spending costs to actual costs and cost limits, measure business activity and performance, and effects, and exception management principles correct unfavourable variances to improve productivity and achieve equal to or lower than the expected cost limit.
Cost control is the basic way to increase the profitability of the enterprise and outside pressure resistance, the main security survive. An enterprise's cost control system including enterprise organization system, business information systems, Enterprise appraisal system and Enterprise incentive system, etc four basic content.
1. corporate organization system
In an enterprise organization, usually will target is divided into several child targets, and specify a subordinate unit responsible for completion. Each target can be divided into many of the more specific objectives, and shall specify the next level of departments to complete. Enterprise organizational structure can be used to manage grades and management by the two indicators to describe. Management level is the most advanced units and the lowest level among grade; manage range is also known as control span refers to a number of their subordinate units. Organisation of a major problem is dealing with the relationship between centralization and decentralization. In a highly centralized organization, power is concentrated in higher management levels, lower-level managers have little decision-making power. In an enterprise, the power may also be in a functional areas within the
Highly concentrated, and other functional areas in the highly fragmented. In General, financial and personnel are highly concentrated areas and business areas are moving toward a decentralized model of development.
Cost control system must adapt to the organizational structure of enterprises, namely enterprises budget is classified by the number of child budget, each child budget represents a partial, workshop, Department or other units of the financial plan. The costs associated with this control, such as record actual data, the control report is divided into small units, thus forming a responsible budget and responsibilities of the accountant.
2. the enterprise information system
Cost control of another component of enterprise information system, which is the responsibility of the accounting system. Responsibility for the accounting system is part of the enterprise's accounting system, responsible for metrology, transmission and reporting cost control use of information. Responsibilities include accounting system is mainly responsible for budget, accounting budget implementation, analysis and evaluation and reporting of results for the three parts.
Typically Enterprise making sales, respectively manufacturing, cost, financial, and other budget. This budget main areas as management to implement an organization's overall budget. In order to facilitate control, you must individually examine the performance of the various holders, this requires the control responsibility center to break the budget. This work is the responsibility of budget preparation, its purpose is to enable each responsibility centre managers identify their responsible matters and shall control. Before the start of the actual business, responsible for budget and other control standard to release to the relevant personnel, they take control of their own activities. On the actual cost, revenue and profits, as well as the amount of money, etc., to responsibility centre brings together and classification. In accounting, to reduce the transfer of responsibility, when allocating common costs shall be the responsibility vested in the choice of appropriate methods of allocation. Between the various units to provide products or services, to develop appropriate internal transfer prices to the benefit of a separate assessment of their performance, and report on the implementation of the budget.
At the end of the budget shall prepare the annual report, comparison of budget and actual implementation, analysis of variance and accountability. In addition, exception reporting, is not provided for in the budget and budget limits, to promptly to the appropriate management level reports to make decisions in a timely manner.
3. Enterprise appraisal system
Enterprise appraisal system is cost control system to work. Its main elements are:
① provisions represent general responsibility center goals. It was a category of responsibility centres, may be the sales, controllable costs, net profit or return on investment. Necessary to determine the number of times the target level of scale, such as market share, defective rate, possession of funds limits, etc.
② the central objective of the measure provided for liability of connotation of explanation. For example, what is the sales, gross sales or deduction of discounts and discount of net sales. As standard, the definition of its meaning must be very clear in advance to avoid the ambiguity arising from the specific implementation.
③ provides performance review standard measurement method. For example, cost sharing, mutual how labor and product use internal transfer prices, using the historical cost or replacement cost, etc., are to provide specific calculations.
④ provisions adopted budget standards. For example, the use of fixed or flexible budget is loose or tight budgets, budget use the various constants.
⑤ provides performance reports of content, time, level of detail.
4. corporate rewards
Enterprise incentive systems is maintaining cost control system for effective operation of the guarantee. People work effort by the performance evaluation and incentive schemes. Responsibility centre managers tend to concentrate on the performance evaluation of the work, especially performance can affect the incentives of the section. Therefore, the incentive can motivate more diligent work.
Incentives should be clearly defined in the system of incentives that have been examination departments and personnel know performance and reward, know what kind of performance will be what kind of awards. Appropriate incentive system will encourage their employees to their own behavior into the enterprise overall objective consistent track, to strive for better performance.
Cost control of basic programs including cost standards, cost variance analysis, performance measurement and reward and so on. Establishing a cost control standards, is an important aspect of it for later analysis, performance review and correct the difference provided a good basis. Cost control standards can have a variety of options, more commonly have standard costs and flexible budget.
1. the standard cost >
Standard costs through precise investigation, analysis and measurement technology, used to evaluate the actual cost, measure the efficiency of a projected costs.
In the standard cost, basic exclusion should not occur, it is considered a "should cost". Standard costs reflect the objectives and requirements of enterprises, mainly used to measure products manufacturing process efficiency and control costs, and can also be used for the valuation of inventory and cost of goods sold.
The cost of standard setting, usually to determine direct materials and direct labour costs and, secondly, to determine the cost of manufacturing costs of the standards, the finalization of the standard cost per product. Either a cost item, you need to identify their dosage standard and price multiplied by the standard, both derived from cost standards. Usage standards including material consumption per product, per product of direct labor hours, etc, is mainly composed of production technology Department Chair, absorption standards implementation in departments and employees.
Prices include raw material price and hourly wage rates, hours overhead rates, by the accounting department and other relevant departments to analyze. The Procurement Department is responsible of material prices, the human resources department and the production sector on hourly rate. The workshop on hours of manufacturing overhead rates assume responsibility in the development of prices for standard time to consult with these departments.
2. flexible budgets
The so-called flexible budget, is the enterprise cannot accurately predict the volume of cases, depending on the quantity and profit between regular relationship,

According to a series of business volume level of the budget is scalability. As long as these relations, flexible budget can last a long time, you do not have to repeat every month. Flexible budget is mainly used for various indirect costs, some enterprises can also be used for profit budgets. Compared with a fixed budget, the budget is based on a flexible series of their volume levels, thus expanding the scope of the budget; in elasticity estimates, both actual business volume reached what level, are applicable to a set of cost data to play the role of control. At the same time, flexible budget is based on the cost of different morphological categories listed for easy calculation of the expected "at the end of the actual volume of the budget costs" (that is, according to the actual volume calculation should achieve cost level), the implementation of the budget and the establishment of evaluation and evaluation in a more practical and comparable basis.
Flexible budget main use is as control costs and evaluation, examination of cost control performance tools. At the beginning of the budget period, provides control of the data needed to cost; at the end of the budget period, can be used for evaluation and assessment of actual cost. Preparation of the basic steps of elastic budget is: select the business volume calculation units; determine the applicable business scope; itemized analysis and determine the cost and quantity of traffic; the relationship between the calculation of the estimated cost, with a certain expression.
① prepare flexible budget, to choose one of the most representative of the sector of production and operation of the business unit level. For example, to manually operated main shop, should use manual work; making of a single product or parts of the sector, you can use real numbers; manufacture various products or parts of the sector, you can choose manual or machine work; repair departments can choose directly a repairman.
② flexible budget business volume range, depending on the enterprise or sector of the volume change of circumstances, but be sure to make the actual volume does not exceed the established range. In General, you can determine the normal production capacity of 70 per cent — 110 per cent, or to the history of the highest volume and lowest business volume for the upper and lower limits.
③ elasticity estimates or low quality level to a large extent depends on cost analysis of the degree of precision. The so-called proterty, refers to the total cost to the business volume dependencies, when traffic changes, costs have different behavior, can roughly be classified into fixed costs, variable cost and the cost of these three types of mixed. Fixed costs are not affected by the cost of their impact; variable cost is with traffic growth is not in direct proportion to the costs. Mixed cost between fixed and variable cost, and ultimately can be broken down into fixed and variable cost in two parts. In this way, all of the costs can be broken down into fixed and variable cost these two parts.
④ elasticity estimates of expressions you can use the list method (multiple levels) and formula method. Use the list method, determine the extent of business volume, partition out several different levels, and then calculate the budgeted cost of work performed, including a budget summary table. Formula method followed by the principle that any costs can be divided into fixed and variable cost, y = ax + b, so long as listed in the budget of the fixed costs and unit costs of change, at any time using a formula to calculate either the budgetary cost of the business volume x y.
Cost control and auxiliary materials management in general there has not been effectively control, budget release is not timely, the cost is not effectively controlled,. fixed asset efficiency low, not paying attention to cost analysis, production progress control is not strict. Because of some enterprises of industry characteristics, makes the production period longer, in the production process, because the "people" of subjective factors lead to delays in the production phase, resulting in depreciation, wages, management increases, material loss, making the product cost increase. To address the cost control issues, strengthen cost control, you must take the following measures:
Guarantee product quality, guarantee period. In respect of a product, quality, production and efficiency are the contradictions of opposites. Quality is the prerequisite for enterprises in the fierce market competition to maintain sustainable development, the invincible, but production period and benefit also be dispensed with. If only in order to deliberate pursuit of quality, and production and efficiency, the enterprise will also append missing profits funds resulted in development of insufficiency, eventually leading to atrophy and bankruptcy. Therefore in the development of a product's production programme, to carry out scientific feasibility and the economic analysis, which would be the first to achieve product cost forecasts, plans for the future of effective control to premise security. Some enterprises often simply focus on better and faster, for less than the savings are often taken into account at all costs to invest a lot of manpower and material resources increases costs, resulting in a waste. Therefore, the establishment of reasonable product designTo develop a set of science and technology programmes, so that the quality and efficiency to achieve the best balance, is a necessary condition for product cost controlling.
Production period is a limited time, resources, and cost control have a specific value, i.e. the value of the "production" phase. On product, product quality, cost and production stage are the three main lines of production management and production period is reasonable direct impact on product quality and cost, therefore, costs management time management is very important. Therefore, reasonable arrangement of the production period, reaching maximum shrinkage production period, will reduce production costs, help an organization achieve better economic efficiency.
Based on the purchase cost component of the plan to develop raw material prices; if the purchase price, shipping fees, reasonable wear and tear, the way into the library before the selected arrangement fee. In order to reduce the material procurement costs, improve quality, procurement shall be published in the various links on strengthening cost concept, strengthen supervision and management to purchase high quality low priced products, avoid materials procurement process management vulnerability and unnecessary waste, material procurement personnel assume responsibility for reducing procurement costs.
In production management, material quality, the number of control, we must strengthen the material management workshop and do so in a clear, useful functions. Receiving materials, management personnel according to the production plan amount on the used material quantity production workers to monitor and take effective Super fine, Festival award measures to mobilize its initiative to reduce the use of the materials for receipt and vulnerabilities in order to save the content.
To cost control as the main line, forecasting, planning, controlling, accounting for one-stop management costs by cost management is an integrated production management, production management reflected often is to shop as accounting units, this requires the workshop staff must strengthen cost concept, production of profit and loss responsibility. Production management level are reflected in all aspects of production management, this will require strengthening the various links. In the business management in information sharing, and with the actual conduct of the business, cost analysis, profit/loss exceptions promptly find reasons to be corrected.
In General, the production process is a dynamic process of inputs and outputs, only make full use of modern methods of cost control, comprehensive, timely, accurate and effective cost control, good products to achieve profit maximization and cost minimization of goals, increase of social and economic benefits. Reference documents:
1. summer wide clouds. the strategic cost management "Lixin accounting press, 2000.10
2. Mao China. " The modern market economy cost control new concept "the financial Digest 2002.02
3. weekly Pernia. " Costs of management of the new mentality "of the statistics and decision making on 2005.10