Control the Costs Essay Example | Topics and Well Written Essays - 1500 words

Control the Costs - Essay Example This is at your discretion. c. lf you have difficulty obtaining figures, for confidential reasons, you may still itemize those costs incurred. lf possible, use percentage proportions to express the different costs. I believe that following costs could be reduced to improve efficiency: cost of raw materials, and direct labour and overtime hours. The cost of raw materials could be reduced if the company will make purchase raw materials for three months requirement instead of the present policy of buying only for one-month requirement. Buying at a bigger volume could be cheaper because of the discount that would be availed and the reduced ordering and set up cost because of making more orders that are frequent The cost of overtime cost, which is being part of the direct labour, could also be improved by avoiding overtime work by employees and instead increasing the wages of these present workers and hiring additional personnel. The present rate for over time work is 150% of regular rate and rendering overtime also increases the cost of other factory head like the increase cost of electricity because of longer time and higher maintenance cost because of longer use of the equipments. The monitoring of cost is  not successful because of lack of person responsible in controlling cost. What happens in reality is that there is no serious cost control program in the company. I believe that the processes involved in the processing of papers involving payment to suppliers takes too much time before the supplier is paid. The unnecessary hands and papers involved in the processing of payment is eating the valuable time of company officer that should have been involved in making good plans for the company. a. As to the proposal to purchase raw materials for three months requirement, the consequence would be wider space to place the delivered raw