In fact, basic standards are not very pragmatic as they emphasize the past instead of the future. Payment would be done on a daily basis and would call for direct supervision by a foreman. The budget is a plan for the future and as such it is a base for cost control in the long run.
Labour Cost Control Cost Reduction Strategies Module 1 focuses on what is procurement and different ways that items may be procured. Initially a plan or set of targets is established in the form of budgets, standards or estimates.
Effective cost control will require the following actions to be taken: Essentials of Budgetary Control System: Flexible budget Introduction to cost control adaptable to changes in operating conditions.
An important thing about variances is that the causes of variance be personalised. The following are the characteristics of budgetary control: Breakeven analysis is a common and important part of cost control.
The system promotes balanced activities in the organisation.
At all times it should comprise the best possible estimate of the final cost of the project and of the future cash flow. Cost control must be based on some measure of importance of these significant deviations.
Confirmation that the variations are essential. In the performance budget each item of expenditure is related to a specific performance. A budget is an anticipated financial statement of revenue and expenses for a specified period. If the top management encourages, budget will be most effectives.
The move-in cost for the bulldozer is a fixed cost, and is independent of the quantity of the earthwork handled. Unimportant activities are eliminated or made into productive and profitable. It would be possible to do the earthwork by hand or by bulldozer. Standard costing is one of the prominently used systems of cost control.
It highlights the importance of establishing productivity standards and the use of manning guides for more cost effective scheduling.
A major issue in standard costing is the determination of the tightness of standards which may range from a desire for engineering perfection to very slack practices. Costs are ascertained and information about achievements is collected and reputed.
Here, the approach to the problem of useful cost data is that of identification, isolation, and control of the factors affecting cost. Materials are wasted in a number of ways such as effluents, breakage, contamination, inefficient storage, poor workmanship, low quality, pilfering and obsolescence.
Master Budget and Functional Budget. One illustration of a breakeven analysis would be to compare two methods of road construction for a road that involves a limited amount of cut-and-fill earthwork.
Since then, it has been used by a number of states and business organisations in the U. Capital Budget and Revenue Budget. Developing the cost pan also involves adding detail as more information about the work is assembled, replacing cost forecasts with more accurate forecasts or actual costs whenever better information can be obtained.1.
PRINCIPLES OF COST CONTROL. Introduction Basic Classification of Costs Total Cost and Unit-Cost Formulas Breakeven Analysis Minimum Cost Analyses.
Introduction. Cost is important to all industry. Costs can be divided into two general classes; absolute costs and relative costs.
Breakeven analysis is a common and. Cost control is inextricably linked with the project functions of quality control and schedule control. It is the job of project managers to make sure that equilibrium is achieved between quality, schedule and cost.
Cost control is simply the prevention of waste within the existing environment. This environment is made up of agreed operating methods for which standards have been developed.
Cost Control: Meaning, Tools, Techniques and Estimation of Cost Control. Article shared by: ADVERTISEMENTS: Cost Theory: Introduction, Concepts, Theories and.
Food & Beverage Cost Control - Introduction - Free download as Powerpoint Presentation .ppt), PDF File .pdf), Text File .txt) or view presentation slides online. Quick guideline of understanding the basic of food and beverage cost control4/4(11). introduction to purchasing & cost control Previous Next Introduction/Title: In the current environment of an uncertain local economy, with the reduction in discretionary income, timidity of investors and heightened competition, it is essential that all operations such as yours develop and execute appropriate strategies to better manage costs.
Introduction Topics Books Schedule. Why ENCE As the project evolves, changes occur and the project team must work to maintain control of the cost and time budgeted for the project. Books * Managing the Construction Process (4th Edition) 4th Ed.
By Frederick Gould (ISBN ) RSMeans Cost Data, + Website By RSMeans (ISBN ).Download