The three major inputs into the manufacturing process are direct materials, direct labour and factory overheads. If the costs of any of these are not controlled, they may inflate the cost of manufacturing. If the selling price of the final output is determined by the market for the product and cannot be increased, the profit margin will be reduced.

Required

(a) Organise the class into three groups. Group 1 is to discuss ways in which a business can ensure that direct material costs are controlled. Group 2 is to discuss ways in which direct labour costs can be controlled. Group 3 is to discuss control of overhead costs.

(b) Each group prepares a written summary of its discussion and gives a copy to the other groups.