Why is a cost management plan important?
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Beside this, why is cost management important in construction?
The Cost Control is an important process in construction project. It is widely practiced by contractors and needs to carry out throughout the life of project. The main objective of cost control of a project is to gain the maximum profit within the designated period within the budget.
Beside above, what is the purpose of cost control? The aim of cost control is to produce the best possible building within the budget. The cost plan provides the basis for a cash flow plan, allocating expenditure and income to each period of the client's financial year.
In this way, why is cost control important in project management?
Project cost management sets the baseline for project costs. Effective cost management ensures that a project's budget is on track and will be completed according to its planned scope. Without cost control, a company can easily lose money and costs can go above project profit.
What are the different types of costs?
DIFFERENT WAYS TO CATEGORIZE COSTS
- Fixed and Variable Costs.
- Direct and Indirect Costs.
- Product and Period Costs.
- Other Types of Costs.
- Controllable and Uncontrollable Costs—
- Out-of-pocket and Sunk Costs—
- Incremental and Opportunity Costs—
- Imputed Costs—