The following are the major differences between Cost Control and Cost Reduction:
-The activity of maintaining cost as per the established norms is known as cost control. The activity of decreasing per unit cost by applying new methods of production in such a way that it does not affect the quality of the product is known as cost reduction.
-Cost Control focuses on decreasing the total cost while cost reduction focuses on decreasing per unit cost of a product.
-Cost Control is temporary in nature. Unlike Cost Reduction which is permanent.
-The process of cost control is completed when the specified target is achieved. Conversely, the process of cost reduction has no visible end as it is a continuous process that targets for eliminating wasteful expenses.
-Cost Control does not guarantee quality maintenance, however 100% quality maintenance is assured in case of cost reduction.
-Cost Control is a preventive function as it ascertains the cost before its occurrence. Cost Reduction is a corrective action.