100% satisfaction guarantee Immediately available after payment Both online and in PDF No strings attached
logo-home
Unit 2: Business Resources- M4 £8.79   Add to cart

Essay

Unit 2: Business Resources- M4

 7 views  0 purchase

M4: analyse the reasons why costs need to be controlled to budget.

Preview 1 out of 2  pages

  • September 10, 2021
  • 2
  • 2018/2019
  • Essay
  • Unknown
  • A+
All documents for this subject (69)
avatar-seller
Sheyy01
Name: Shermarrie Weekes
Unit 2: Business Resources (M4)
Introduction
This assignment focuses on the importance of cost control within the business, along with
reasons and benefits of controlling costs.

Cost Definition
A cost is an amount that has to be, paid in order to get something. Usually, in a business a
cost is monetary valuation of effort, material, resources, time and utilities consumed, risk
incurred and opportunity forgone in production and delivery of goods or service.

Types of Costs
There are two main types of costs, which need controlling, in order to manage the budget of a
company. These costs include:
Fixed Cost- this cost does not change despite an increase nor decrease in value of goods or
services within a business. Fixed costs are expenses that have to be, paid by a company.
Fixed costs that make up the businesses total financial structure requires s high level of
revenue in order to break even.
Variable Cost- this cost is the opposite of fixed. This corporate expense changes in value
according to the production output. It increases and decreases depending on the company’s
production volume.


Fixed Costs Variable Costs
 Insurance  Sales Commission
 Interest Expense  Direct Labour Costs
 Utility Expenses  Utility Costs
 Property Taxes  Cost of raw materials
 Depreciation of Assets


The controlling of costs in a business is important. It has a lot of benefits that can help the
business strive and grow in the future. Cost control is the process by which a business
identifies and attempts to reduce expenses to increase profits and limit costs which starts
with the process of budgeting. In any profit orientated business, they aim to make a profit
because if not done, the business will not be able to cover any additional costs and normal
costs as they should. Reasons for cost controls are to provide targets for members of staff.
The business will also need to control costs of business competition, or enough money
provide an increase in salary for workers or training staff and to motivate staff to perform an
accurate job within the business. Extra money is also good to help the business make
expansion which provide more space to do a bigger job.

The benefits of buying summaries with Stuvia:

Guaranteed quality through customer reviews

Guaranteed quality through customer reviews

Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.

Quick and easy check-out

Quick and easy check-out

You can quickly pay through credit card for the summaries. There is no membership needed.

Focus on what matters

Focus on what matters

Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!

Frequently asked questions

What do I get when I buy this document?

You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.

Satisfaction guarantee: how does it work?

Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.

Who am I buying these notes from?

Stuvia is a marketplace, so you are not buying this document from us, but from seller Sheyy01. Stuvia facilitates payment to the seller.

Will I be stuck with a subscription?

No, you only buy these notes for £8.79. You're not tied to anything after your purchase.

Can Stuvia be trusted?

4.6 stars on Google & Trustpilot (+1000 reviews)

67096 documents were sold in the last 30 days

Founded in 2010, the go-to place to buy revision notes and other study material for 14 years now

Start selling
£8.79
  • (0)
  Add to cart