Accounting and control of Material cost

Meaning and Definition of material cost control

       Material cost control is control of the cost of materials by eliminating wastages in purchasing, storing and pricing the issue of materials to the departments or cost centers.

   Materials include:

1.Direct material- easily identified and traced.

2.Indirect materials-not easily identified and traced.

     Objectives/Need/Advantages of

Material Accounting and control

1. Ensure regular supply of         materials.

2.Availability of quality materials.

3.prevents over stocking

4.purchase at lowest cost

5.purchase of quality materials

6.Reduces storage.

7.provides information to the management. 

Stages or steps in material control

     I.PURCHASE CONTROL-controls cost of materials through systematic purchase of materials. 

    II.STORES CONTROL- controls cost of materials by eliminating all wastages in storing.

   III.PROPER ISSUE OF MATERIALS-controls cost of materials by fixing the price at which materials are issued from stores to production centres.