CHAPTER ONE
Introduction
1.1 Background of the study
Management as a discipline is becoming more dynamic in nature as a result of complexities that surrounds our business world. Numerous routine planning and control activities formally performed by clerks have now been developed into sophisticated functions with far reading effect on corporate objectives and profits. Cost control, a vital element of cost management is one of such functions. According to Odetayo (1998), cost can be defined as the monetary measures of value consumed acquired. It is the amount of expenditure (actual or national) incurred on or attributable to a specific thing or activity. Cost can also be defined as the amount of goods or the provision of a service (Eddy, 1991). In other words, it means the amount of expenditure incurred on a particular project or venture over a given period of time. It could be fixed cost, variable cost and opportunity cost etc. In addition, objectives of cost analysis is the process of discovering the purpose in which factors of production have been used for concise information in management decision. However, cost control is defined as a profit maximize, monitoring and a central criterion of costs.
This means that a task of controlling must be related to decision of importance for the success of operation as a whole, within the scope of the planning and controlling process. Further, another relevant area of cost is budgeting control which is defined as a system of managing a business. It also deals with other control like inventory control or stock control, variance analysis (standard and actual comparism control)
1.2 Statement of the Problem
Cost control problem are not peculiar to manufacturing organisation only but also extended to armed forces, government parastatals and other PAYEE agencies. The following are the cost control problems in manufacturing concern:
(a) The divisible and manner of cost control in the company.
(b) The company is facing the problem of setting budget and standard cost.
(c) The problem of comparing the total accurate standard or variance.