Cost control are important aspects of project management. Cost data for a project may be associated with activities or groups of activities or with resources, such as personnel or equipment. For example, consider a project that consists of several subprojects, each of which is contracted to a different company. From the contracting company's point of view, each subproject can be treated as one cost item; all the company needs to know is how much each subproject is going to cost.
On the other hand, another project may contain several activities, each of which requires two types of labor, skilled and unskilled. The cost for each activity in the project may have to be computed on the basis of how much skilled or unskilled labor that activity uses. In this case, activity and project costs are determined from the resources used. Further, for any project, there may be several ways in which costs need to be summarized and accounted for.
In addition to determining the cost of each individual activity, you may want to determine periodic budgets for different departments that are involved with the project or compare the actual costs that were incurred with the budgeted costs.
On the other hand, another project may contain several activities, each of which requires two types of labor, skilled and unskilled. The cost for each activity in the project may have to be computed on the basis of how much skilled or unskilled labor that activity uses. In this case, activity and project costs are determined from the resources used. Further, for any project, there may be several ways in which costs need to be summarized and accounted for.
In addition to determining the cost of each individual activity, you may want to determine periodic budgets for different departments that are involved with the project or compare the actual costs that were incurred with the budgeted costs.
