StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...
Free

Schedule and Cost Control Techniques: - Essay Example

Comments (0) Cite this document
Summary
These are percentage of completion method and completed contract method. In the percentage of completion method, revenues are recognized as the project develops and costs are expensed as the project…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER98.2% of users find it useful
Schedule and Cost Control Techniques:
Read TextPreview

Extract of sample "Schedule and Cost Control Techniques:"

Project management approaches to accounting methods and tracking project spend at the project vs. corporate levels There are two commonly used project management approach to accounting methods. These are percentage of completion method and completed contract method. In the percentage of completion method, revenues are recognized as the project develops and costs are expensed as the project progresses. The realization of revenue and recognition of cost are acknowledged on periodic basis (Bevilacqua, 1987). The percentage of completion accounting method allows project managers to report income on the project as the works progresses and being done. This method is ideal for projects that are long-term whose output or job completion is predictable (Rachui, 1974).
Completed contract method on the other hand differs on its treatment of both revenue and costs because they are only realized and capitalized only at the completion or end of the project. This accounting method is a good alternative to projects which are considered irregular where it would be difficult to estimate the amount of work completed at a given time (Rachui, 1974).
To effectively track costs spent at projects being done and corporate level, costs are being segregated as direct and indirect cost. Costs associated or specific on project such as delivery order, task order, contract, etch which are directly related to the project. Indirect costs can be broken down further into labor and travel expense (of the subcontractor). On the other hand, costs that are not directly related to a project and incurred at the corporate level are treated as indirect cost such training of project managers. They are usually divided into logical groupings such as general and administrative expense, overhead and fringe costs. Indirect costs are more difficult for project managers to track because they exercise very little control over it (Lundsten and Zimmermann, 2006).
My views over these two concepts
Financial management is an indispensable tool in project management that allows project managers to track project cost and deliver the desired results to its client. Between the two accounting methods of percentage of completion method and completed contract method, I am more incline to prefer the percentage of completion method. It is because such accounting method is more accurate and provides the project manager a timely assessment of the actual cost and revenue.
It has to be noted that financial statements are supposed to aid its users in their economic decision and percentage of completion method serves that purpose than the completed project method because it provides the project manager more accurate information about the project. He or she can determine efficiency during the course of the project and could apply adjustments depending on the information provided by percentage of completion method. Completed contract method does not allow tracking of the cost and revenue of the project because everything is just acknowledged and realized when the project already ended. In a way, it can be said that the financial information during the duration of the project is inaccurate using the completed method because it did not factor in the costs that are already incurred and the work that actually done. Thus, the project manager will only know whether he made profit or incurred loss when the project is already done which is not a good business practice.
References
Bevilacqua, F. (1987). The best accounting method: Completed contract or percentage of completion. The National Public Accountant, 32(6), 24-24. Retrieved from http://search.proquest.com/docview/232312215?accountid=32521
Lundsten, D. J., & Zimmermann, S. E. (2006, The financial aspects of project management. Contract Management, 46, 14-16,18-22. Retrieved from http://search.proquest.com/docview/196310453?accountid=32521
RACHUI, C. (1974). Percentage of completion accounting. Management Accounting, 56(6), 41-41. Retrieved from http://search.proquest.com/docview/229749737?accountid=32521 Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Schedule and Cost Control Techniques: Essay Example | Topics and Well Written Essays - 500 words”, n.d.)
Retrieved from https://studentshare.org/management/1601939-schedule-and-cost-control-techniques
(Schedule and Cost Control Techniques: Essay Example | Topics and Well Written Essays - 500 Words)
https://studentshare.org/management/1601939-schedule-and-cost-control-techniques.
“Schedule and Cost Control Techniques: Essay Example | Topics and Well Written Essays - 500 Words”, n.d. https://studentshare.org/management/1601939-schedule-and-cost-control-techniques.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Schedule and Cost Control Techniques:

Construction Cost Control & Management

...should invest in project Y because it has the highest NPV of 1041.90 pounds. The returns on the initial capital are more in the second project than in the first project and, therefore, investing in project Y will be much profitable. Conclusion In conclusion, the PERT chart has been critically used to schedule, organize, and coordinate the tasks in this project. It has effectively ascertained the expected time of the project for effective planning and accountability of time and estimation of resources and cost. From the analysis, the pessimistic, normal and optimistic time were estimated. This was critical in showing the various activities keeping in mind their dependence to each other and particular...
15 Pages(3750 words)Coursework

Cost Control

...?Cost Control Cost Control is very important in construction industry because inappropriate cost control results in over-budgeting of the project which can ultimately result in the bankruptcy of the contractor firm and failure of the project. Over the years the methodology adopted for cost control has changed and new techniques are being employed. In general, construction cost control consists basically of monitoring actual performance against cost estimates and identifying the variances. The traditional cost...
3 Pages(750 words)Essay

Schedule and Cost Control Techniques

...responsibility and I believe that in order to make it a success, the costs and schedules associated with this project need to be considered and management effectively. Since Project management is a very delicate job and requires the necessary skills and aptitudes to implement and execute them as smoothly as one can. However, it is always possible that the earlier estimates made, schedules prepared may go awry as the future is always uncertain. This means that project managers may not always meet their targeted budgets and schedules. As a first step to review the schedules and control processes, it is very important that project managers...
2 Pages(500 words)Speech or Presentation

Schedule and Cost Control Techniques - Quality

...of the organization are integrated together to achieve the complete focus on achieving the customer satisfaction and meeting the expectations of the customers. However, from the perspective of the project management, total quality management poses a slightly different orientation. Quality in terms of project management means "project management technique or strategy that is implemented to assure that an awareness of quality is embedded in all phases of the project from conception to completion." (http://www.project-management-knowledge.com, 2008). It is believed that implementing quality in service oriented organizations as well as the project management is trickier in comparison to the manufacturing concerns mostly due...
4 Pages(1000 words)Essay

Schedule and Cost Control Techniques

...a satisfactory risk plan." (Ferguson, 2004). Further Risk Metric can also allow project managers to check the compliance of the project with the standards and procedures set in the beginning of the project. Conclusion There are various tools and techniques available to ensure that during the life of the projects, no uncertain issue emerges which has the consequences of disturbing the projects during their life cycle. What is more important to understand that PERT, Risk Metrics and EVM are some of the methods which can really ensure that scheduling and controlling of the costs associated with the project are properly managed besides ensuring that the tradeoffs being made...
3 Pages(750 words)Essay

Schedule and Cost Control Techniques

...Project management techniques are considered as important for the overall success of the project as the effective project management can ensure not only smooth performance of the teams but also ensure that all the components of the project are effectively monitored and managed. The schedule and cost measurement techniques are part of such group of techniques which are considered as the most essential as they determine the practicalities of the project. There are various techniques with the help of which the schedule estimations and scheduling can be performed however the most important of them which are...
2 Pages(500 words)Essay

Schedule and Cost Control Techniques

...Section 6 Stabilize deal with the core process of implementing the new email system in the organization. This section is divided into two sections or two sub activities of go-live and post-live issues mentioning the fact that first phase of the project will look into the issue related with making the new email system live and useable for users whereas the second sub-activity will look into the post-live issue in order to check whether the new system is catering the needs of our users or not. This is basically an activity which will shut down the old servers and make live the new ones. Section 1.6.2 is about the post-live project review and acceptance. The sub-activities related with this main activity are leadership review, key... 6...
2 Pages(500 words)Essay

Schedule and Cost Control Techniques

...of the problem B) Generate and evaluate the possible solutions. C) When solutions are evaluated and identified, choose one typical course of action to follow. D) Implementation of the decision taken. E) Final evaluation of the results achieved as a result of the decision taken. This process is simply inline with the rational decision making process and there are typical practical areas where the formal decision making of such process is required in terms of project management. These decision areas include estimation of costs, selection of various tools to be used, selection of the vendors who will be providing various equipment and services etc. However, decision making falls within two broader areas of decision making....
2 Pages(500 words)Essay

Phase 1 Discussion Board Schedule and Cost Control Techniques

...Running head: DISCUSSION BOARD SCHEDULE AND COST CONTROL TECHNIQUES Discussion Board: Schedule and Cost Control Techniques Affiliation October 2008 Discussion Board Schedule and Cost Control Techniques As a project manager I have the responsibility to design the Process for implementation, implementing a schedule, and estimating expected costs of the Email System Upgrade for my organization.1 In this project we will follow these phases: Initiating phase in which we determine the feasibility, project charter. Then next phase we have Planning in which we have three sub tasks survey, design and analysis. First step in this phase in which: We have to determine the schedule of the project. This project is an up gradation project... as Budgeted...
2 Pages(500 words)Essay

Cost Control

...Cost Control Affiliation with more information about affiliation, research grants, conflict of interest and how to contact. CHAPTER 15 Cost Control EX15.2 flexible Budgeting: Rocky mountain Manufacturing produces a single product. The original budget for November was base on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow: Original Budget Actual Costing Direct materials …………………….. $551,250 is ...
5 Pages(1250 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Schedule and Cost Control Techniques: for FREE!

Contact Us