Project Cost Management
The Project Budget
For cost control of the project, the construction plan and associated cash flow estimates can provide the baseline reference for subsequent project monitoring and control.
The detailed cost estimate provides baseline for the assessment of financial performance during the project.
If the cost of project is within the detailed cost estimate then the project is under financial control.
Overruns in cost category gives signal of problem.
For control & monitoring purposes , the original detailed cost estimate is typically converted to a project budget.
Expenses incurred during the course of a project are recorded in specific job cost accounts to be compared with the original cost estimates in each category.
Individual job cost accounts generally represent the basic unit for cost control.
Material & Labor Cost
Material quantity & labor inputs within each job account is also typically retained in the project budget.
With this actual material usage and labor employed can be compared to the expected requirements.
As a result , cost overruns or savings on particular items can be identified as due to change in unit prices, labor productivity or in the amount of material consumed.
For cost control of the project, the construction plan and associated cash flow estimates can provide the baseline reference for subsequent project monitoring and control.
The detailed cost estimate provides baseline for the assessment of financial performance during the project.
If the cost of project is within the detailed cost estimate then the project is under financial control.
Overruns in cost category gives signal of problem.
For control & monitoring purposes , the original detailed cost estimate is typically converted to a project budget.
Expenses incurred during the course of a project are recorded in specific job cost accounts to be compared with the original cost estimates in each category.
Individual job cost accounts generally represent the basic unit for cost control.
Material & Labor Cost
Material quantity & labor inputs within each job account is also typically retained in the project budget.
With this actual material usage and labor employed can be compared to the expected requirements.
As a result , cost overruns or savings on particular items can be identified as due to change in unit prices, labor productivity or in the amount of material consumed.
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