1、Study on Project Cost Control of Construction Enterprises By: R. Max Wideman Abstract With the increasing maturity of construction market, the competition between construction enterprises is becoming fierce. The project profit is gradually decreasing. It demands that all construction enterprises enh
2、ance their cost control, lower costs, improve management efficiency and gain maximal profits. This paper analyses the existing problems on project cost control of Chinese construction enterprises, and proposes some suggestions to improve project cost control system. Key Words ： Construction enterpri
3、ses, Project management, Cost control After joining the WTO, with Chinese construction market becoming integrated, the competition among architectural enterprises is turning more intense. Construction enterprises must continually enhance the overall competitiveness if they want to develop further at
4、 home and abroad construction market. Construction Enterprises basically adopt the project management-centered model, therefore, it is particularly important to strengthen project cost control. 1.The Current Domestic Project Cost Classification and Control Methods Cost refers to the consumption from
5、 producing and selling of certain products, with the performance of various monetary standing for materialized labor and labor-consuming. Direct and indirect costs constitute the total cost, also known as production cost or manufacturing cost. Enterprise product cost is the comprehensive indicator t
6、o measure enterprise quality of all aspects. It is not only the fund compensation scale, but also the basis to examine the implementation of cost plan. Besides, it can provide reference for product pricing According to the above-mentioned definition and current domestic cost classification, construc
7、tion project cost can be divided into direct costs and indirect costs. Direct costs include material cost, personnel cost, construction machinery cost, material transportation cost, temporarily facility cost, engineering cost and other direct cost. Indirect costs mainly result from project managemen
8、t and companys cost-sharing, covering project operating costs (covering the commission of foreign projects), projects management costs (including exchange losses of foreign projects)and companys cost-sharing. At present the main method for domestic construction enterprises to control project cost is
9、 to analyze cost, naming economic accounting, which is the major components of cost management and the analysis of economic activities. In accordance with its scope of target and deep-level of content, GM project cost analysis method can be divided into two categories, namely, comprehensive analysis
10、 of project cost and cost analysis of unit project Comprehensive analysis of project cost. It is carried in terms of budget and final accounts, cost reduction programs and construction installation costs. The methods used are as follows: (1) comparing the estimated cost and actual cost. Check the re
11、sult to reduce cost, lower cost index and budget status. (2) comparing actual cost and project cost. Check cost reduction programs as well as the windage between the actual cost and plan cost. Inspect the rationality and implementation of techniques organizational measures and management plans.(3) c
12、omparing lower cost of the same period last year. Aanalyze causes and propose the improving direction. (4) Comparison between engineering units in cost-cutting. Identify the units cost-reducing, which finishes projects, with a view to further cost analysis. Cost analysis of unit project. Comprehensi
13、ve analysis only understand project cost overruns or lower. If we want to get more detailed information, each cost item analysis of unit project is needed. Analysis mainly from the following aspects: (1) Materials cost analysis. From the view of material stock, production, transportation, inventory
14、and management, we can analyze the discrepancy impact of material price and quantity, the cost-reducing effectiveness resulting from various technical measures, the loss from poor management. (2) Labor cost analysis . From the number of employment, hours of use, ergonomics, as well as wage situation
15、, we can identify the savings and waste during labor use and fixed management. (3) Construction machinery cost analysis. From the construction options, mechanization degree, mechanical efficiency, fuel consumption, mechanical maintenance, good rates and utilization, we can analyze the yield and cost discrepancy of fixed-class ergonomics, the cost of poor classes, focused on improving mechanical utilization efficiency and waste caused by poor management. (4) Management cost analysis. From construction task and organizational staffing changes,
