Review of literature in cost reduction and control
Answers
Answer:
Explanation:
A literature review is a body of text with aim to review the critical points of
current knowledge including substantive findings as well as theoretical and
methodological contributions to a particular topic. Literature periodicals do
not report any new or original experimental work, as they are mainly from
secondary sources. Also, a literature review can be interpreted as a review of
an abstract accomplishment.
The purpose of the existing chapter is to present a review of literature relating
to the cost analysis of cement companies or studies done on cost, cost control
and cost control techniques. Cost is an important component in the smooth
working of business units, it has not enticed much attention of scholars on
developing new cost control and reduction techniques. Whatever studies
have conducted, those have exercised basically on the understanding of cost,
its elements, cost control techniques. A decent number of studies with
pioneered work in this area have been conducted abroad, along with it, Indian
scholars have also conducted research studies exploring various aspects of
cost analysis. There is a wide variety of literature written on cost analysis,
cost control & cost-reduction some of these are listed below:
Phill Carroll (Carroll, 1953) in his book on “How to Control Production
Costs” stresses the need for improved cost analyses and control by business
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to secure reasonable profit expectations. The book points out various
inaccurate and illogical cost-accounting techniques used by many
companies. Every effort is made to create a questioning attitude by
management which will make it aware of its company’s faulty procedures
and lead to improved practical methods of cost control.
Great emphasis is placed upon the need for more detailed cost accounting,
depicting actual conditions so that good judgment can be applied to control
and reduce costs. One is made aware of the need to allocate properly the costs
of rework, expensive machines, work and storage areas, and similar items to
the specific products requiring them. The use of average figures for overhead
is glared upon because the individual effects of component factors might be
hidden if they tended to counteract each other. The use of small burden
centers and appropriate bases for overhead rates is stressed as being
imperative if companies are to have good control of costs.
Both the subject and the manner in which the book is written should make it
particularly valuable to managers and superintendents of medium- and smallsized companies. The numerous written and graphical illustrations would aid
those with an average knowledge of accounting practices to have a better
understanding of procedures in their own companies and the possible need
for improvement. Accountants and controllers would very likely find the
book prompting them to take a second look at their own cost systems. Phill
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Carroll considered that cost reduction can help companies keep competitive
positions.
Charles T. Horngren, the Edmund W. Littlefield (Horngren, Datar, & Rajan,
2014) Professor of Accounting, Emeritus, at the Stanford Graduate School
of Business, credited with inventive modern-day cost management practices
known to everyone as Chuck. Horngren was inducted into the Accounting
Hall of Fame and was honored repeatedly for his contributions to the
American Accounting Association in 1969, for which he served as president
and director of research. His textbook of Cost Accounting: A Managerial
Emphasis which is now in its 14th edition. It is just one of several of his
books that have shaped the education of generations of accounting students
of the whole world.
Horngren (Horngren, Datar, & Rajan, 2014) was credited with changing
traditional accounting education in the 1960s "from cost accounting's
overwhelming emphasis on accumulation and calculation of product costs to
managerial accounting, which explores the uses of costs for various
purposes," wrote Thomas Burns, a professor at Ohio State University and
chairman of the Accounting Hall of Fame when Horngren was named to the
Hall in 1990.
Spence (Spence, January, 1984), in his study based on a conference
proceeding (Stiglitz & Mathewson) stated that in so many markets, the
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purpose of reducing their costs organizations are competing over time to
expanding their resources. Sometimes the cost reducing investments
function directly on costs. In so many cases it is found that, they take the
form of developing new products that bring in market and whatever
customers need more economic. Therefore, product development can have
the ultimate effect on direct cost reduction