| Abstract: | In modern business conditions, the costs are crucial factor for business activity, survival and
profitability. As a result most of companies focus on cost management for their success in
business. This study examines cost management practices in reducing and controlling of
manufacturing costs of Awash wine share company. In doing this descriptive case study
research design, mixed research approaches were used. Data were collected from 40 Awash
Wine share company employees. The study relied on primary data collected using interview
and questionnaires and secondary data collected from documents and reports of the
company. The collected data analyzed with descriptive statistics such as frequencies,
percentages, mean and standard deviation through statistical tool SPSS. The data presented
in tables, charts, and figure. The study found Awash wine do not widely use cost management
tools and technic like Budgetary control, Standard cost control and setting standards in the
organization to control and reducing manufacturing cost, Awash wine S.C uses Traditional
costing method. It also revealed that middle level employees didn’t participate in budget
preparation of the organization. It also discovered that Awash Winer can reduce costs and
maintain quality products by the use of effective cost control and reduction tools and
techniques such as budgetary control, standard costing, quality control and target costing.
The study recommends that Awash Winner cost management system need to be designed to
help the company’s operation and strategy and should provide reliable targets for
managerial attention, the importance of cost management tools and technic to control and
reducing manufacturing cost and to measure the performance of the organization need to
considered, Awash wine SC should use target costing techniques as a means to reduce its
product cost and become competitive in the industry. Should make a major shift from
traditional costing method which may provide information that is distorted, too exaggerated,
and too late to be used in reducing cost or providing productivity and market projection, The
participation of middle level employee in budget preparation of the organization needs to be
encouraged this can be through skilling the employees on cost and cost management issues.
Furthermore, Awash wine S. C’s top management need to watch regularly cost management
system to control and reduce manufacturing cost elements to become profitable |
