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"In a manufacturing organisation, an increase of 5 per cent in the labour cost may be more troublesome than a 15 per cent increase in postal charges". The associated concept is:

Solution

✅ Correct Option: 1

Since a manager cannot check everything, control is focused on key result areas that are critical to performance. A small deviation in a critical area (5% rise in labour cost) matters more than a large deviation in a minor area (15% rise in postal charges). This is Critical Point Control.

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