---
title: "Short note: Cost control"
subject: "Construction Management"
chapter: 7
key: "semester_8/construction_management:cost-control-note"
source: https://www.bctengineer.com/q/semester_8/construction_management/cost-control-note
site: BCT Engineering
---

# Short note: Cost control

Construction Management · Chapter 7: Controlling Project Integration and Work

- Asked in: 2067 Mangsir (old course), 4 marks
- Video: [26 | Understanding Cost Control in Construction Projects](https://www.youtube.com/watch?v=E9wX2aZCh3o) — Planning Engineer FZE.
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/cost-control-note
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-7

## Question

Write a short note on 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.

## Answer

**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
1. Prepare the cost baseline from the estimate and the work schedule (budget plan).
2. Record actual costs (labour, material, equipment, overhead) in the cost-code system.
3. Measure the work done (progress, earned value).
4. Compare actual cost with budget; find variances (CV, CPI).
5. Find the causes and decide corrective action.
6. 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.

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Cost control is:
   A. Monitoring actual costs against the budget, analysing variances and taking corrective action
   B. Only preparing the estimate
   C. Only paying bills
   D. Only buying cheap materials
   Answer: A. It keeps the project within the approved budget through comparison and correction. (Key point: Meaning)

2. After comparing actual cost with budget, what comes next?
   A. Find causes and decide corrective action
   B. Stop recording
   C. Close the project
   D. Raise the budget automatically
   Answer: A. Variances are analysed, causes found, action decided, then EAC forecast. (Key point: Steps)

3. Which is a common cost control technique?
   A. Earned value analysis and S-curves
   B. Soil testing
   C. Setting out
   D. Curing
   Answer: A. EVA, S-curves, cost coding and reports are standard techniques. (Key point: Techniques)

## Related in other subjects

- [Monitoring and quality, cost, schedule control](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Amonitoring-quality-cost-schedule-control) — Project Engineering, chapter 4
- [Cost control and cost control cycle](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acost-control-cycle-methods) — Project Engineering, chapter 4
- [Elements of cost control; feedback control](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acost-control-elements-feedback-system) — Project Engineering, chapter 4
- [Cost control need; earned value; EVA approach](https://www.bctengineer.com/question.md?key=semester_7%2Fproject_engineering%3Acost-control-necessary-eva-approach) — Project Engineering, chapter 4