- 2067 Mangsir (old course) · 4 marks
Short note: Cost control
Short answer
Cost control monitors actual costs against the budget baseline, identifies variances, and takes corrective actions to finish within approved budget. Techniques include earned value analysis, cost coding, controlling material waste and labor productivity, and timely variation management.
Write a short note on cost control.
Cost control is the process of monitoring actual project costs, comparing them with the budget (cost baseline), analysing variances and taking corrective actions so that the project is completed within the approved budget.
Steps
- Prepare the cost baseline from the estimate and the work schedule (budget plan).
- Record actual costs (labour, material, equipment, overhead) in the cost-code system.
- Measure the work done (progress, earned value).
- Compare actual cost with budget; find variances (CV, CPI).
- Find the causes and decide corrective action.
- Forecast the final cost (EAC) and update the plan.
Common techniques
- Earned value analysis and S-curves.
- Cost-coding and weekly or monthly cost reports.
- Control of material wastage, labour productivity and equipment use.
- Value engineering and change (variation) control.
- Procurement control and timely payments to avoid penalties.
Importance
- Prevents cost overrun and protects profit.
- Gives early warning, so action can be taken in time.
- Provides data for estimating future projects.
Example: if the steel cost is 20% above budget, the site engineer checks wastage and rates, and reduces cutting loss or renegotiates with the supplier.
✓ Answer checked by Claude Opus 5.5 (high effort)
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