The Material Control In Cost Accounting.
Material control is a systematic control over the purchasing storing and using of material to minimizing the possible cost. In every manufacturing concern materials constitute an important factor of production. It is an important element of cost & covering 60-70 percent of the total cost of the production.
Material control may be defined as the level of material maintenance so as to ensure uninterrupted production and minimizing the investment of funds.
Thus material control is the proper control of material which reduces the cost of production, minimizing the investment of fund in the purchases of material & increases the profitability of the organisation.
Essentials of material control: The basic objectives of material control is to obtain requisite quantity of material at right price, right quantity, right quality and from right source. The detailed objectives of material control are as follows:
- Regular supply of material: Material control ensures regular supply of material to the factory so the production may not be held up for want of material.
- No possibility of overstocking and under stocking: By fixing various stock level as minimum level, maximum level ordering level over stocking and under stocking of material can be avoided.
- Minimum Wastage: Proper material management and control reduces wastages of material. Poor stores facilities result deterioration, obsolescence, pilferage, theft, fire, evaporation etc. which directly affect the profitability of the organisation.
- Getting material at reasonable prices: While purchasing materials, it is seen that it is purchased at reasonable low prices but the quality is not to be sacrificed in the plan of low prices.
- Availability of up-to-date information: Up-to-dated and readily material information can be made available to the management, for planning and decision making. The store keeper can supply information because he keeps up-to-dated record of the every item of the store under proper system of material control.
- Adoption of internal check system: Internal check system is the part of material control. Under this system the employees perform their work on rotational basis by which misappropriation of material is minimized.