The structure of the report has to be defined at the start of the project. Project reporting period cut off dates.
Cost control within Company generally consists of the following categories: Details of each Approved change order are recorded separately at control budget level, thereby maintaining a complete back-up of the approved changes.
It requires each manager to justify his entire budget in detail from scratch that is zero-base. If we continued this process for various numbers of days the camp remains in location, we would obtain the results in Table 1.
In fact, basic standards are not very pragmatic as they emphasize the past instead of the future.
However, the forest engineer, the planner, the manager needs to be concerned with the alternative cost - the cost of the lost opportunity.
At this point the levels of production and total cost are the same. The performance aspect is side-tracked in all government or public sector industries department. Here, the approach to the problem of useful cost data is that of identification, isolation, and control of the factors affecting cost.
Advantages of Budgetary Control: Budgetary control is not just the tool of the budget administrator but it is the tool of all.
Standard costing is defined as the preparation and use of standard costs, their comparison with actual costs and the measurement and analysis of variances to their causes and points of incidence.
The control level shall be at sufficient detail to allow for meaningful control and shall allow for timely and cost effective trending, progress measurement and collection of actual costs. Furthermore, the project accountant provides the invoice status information as required Procedure cost control the executive summary report.
Unimportant activities are eliminated or made into productive and profitable. Since budgetary control is duly concerned with concrete numerical goals, it does not leave any ambiguity regarding the targets. Thus this is nothing but the targeted profit and loss statement and balance sheet of the organisation.
Each of these variances is analysed to know the reason leading to the variance. Significant deviations are those that have assignable causes and are therefore largely subject to control of the management. Once the standard costs are determined, the next step is to ascertain the actual cost.
Hence a certain amount of waste is permitted. This means that actual progress at each and every stage should be made known to the manager. Performance Budget and Zero-base Budget. Deficiencies are noted and discussion is started to overcome deficiencies.
Cost control emphasis is on past and present. Fixed costs, on the other hand, are incurred only once and as additional units of production are produced, the unit costs fall.
The management may take up several cost reduction measures but without budgetary control there can be no long range process.
It has its own limitations. So long as costs and timelines match estimates, the project is under control financially. Essentials of Budgetary Control System: It leads to a cautious utilisation of resources since it keeps a rigid check over activities in the organisation. The project Manager shall approve the control budget which than becomes the "original budget" of the project.
On the third day, the total walking time has increased 30 minutes, the fourth day, 45 minutes, and so on. The cost report should show the value of the DDA or a back up report should be available.
Total walking time per man is increasing at the rate of 15 minutes per day. Budgetary control enables to keep up-to-date records of all activities of the business unit as a whole.
The deviations are of two types:. Effective cost control is achieved at this stage by means of close analysis of alternative designs (permanent and temporary works), the realistic pricing of alternatives, analysis of alternative methods of construction, realistic pricing of these alternatives, detailed planning of the task, proper purchasing procedures, organising resources, etc, etc.
2. project cost control procedure Purpose Overview The purpose of this procedure is to specify the requirements for cost control of CAE projects. Project cost control is a key responsibility of the Project Coordinator during the Development phase of each project and at an overview level for all projects from the Planning phase to Closeout.
The cost control system utilizes the project breakdown structure to collect information, develop reports, generate variances and produce plan revisions. VARIANCES Variances are used by management to verify cost and scheduling plans.
Cost control procedures are put to insure that your project costs no more than intended. Chris Henderson, the author of "Project Management for Construction," cites an old definition of a. Here, the approach to the problem of useful cost data is that of identification, isolation, and control of the factors affecting cost.
Basic Classification of Costs. Costs are divided into two types: variable costs, and fixed costs. Variable costs vary per unit of production. To establish a procedure to control flow of information which affects anticipated final project cost.
This procedure shall be used in combination with the "Procedure for Project Variations" , the "Planning Procedure"  and the "Procedure for the Project execution Control system" .Procedure cost control