Management Accounting- Acc 102

Question 1

The three major inputs into the manufacturing process are direct materials, direct labour and manufacturing 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 can not be increased, the profit margin will be reduced.

Required:

1. Discuss three ways in which a business can ensure that direct material costs can be controlled?

2. Discuss three ways in which direct labour costs can be controlled?

3. Discuss four ways in which a business can ensure that overhead costs could be controlled?