On the Essence of Cost Control. :

Cost control activities can eliminate only the continuation of out-of-line performance.

This is true since no one can alter or undo what has already occurred. With this in mind, one must admit that cost control reports cannot be used to control events, but they can be used as the basis for "praise, criticism, or suggestions for change, all designed to improve future performance." A subtle way in which cost control reports might influence performance is via a report card effect since advance knowledge that cost control reports will be issued tends to provide a stimulus to better performance on the:part of the person to be judged.

Required:

Evaluate the above paragraph in terms of the materials presented in Chapter 9.

LO.1