Project Cost System

Question 1

What are some factors to consider when replacing equipment?

Answer 1

1. Purchase Price and Leasing Costs
2. Salvage Value
3. Cumulative Operating Hours
4. Ownership Cost
5. Operating Cost

Question 2

How to save money on equipment costs?

Answer 2

1. Charge equipment rental rates that cover maintenance and operational costs
2. Equipment accounting showing cumulative record of earnings and expenses
3. Charge as a rental unit to account
4. Replace when operational costs exceed equipment earnings
5. Track equipment working, idle, and repair time

Question 3

What is a project cost system?

Answer 3

Is a method of managing the costs associated with a project

Question 4

What does a project cost system involve?

Answer 4

• establishing a budget for the project
• tracking and controlling costs as the project progresses
• ensuring that the project is completed within its allocated budget

Question 5

What tools and techniques are used in project cost systems?

Answer 5

• cost estimation,
• cost planning,
• cost control, and
• cost forecasting

Question 6

Why is a project cost system important in project management?

Answer 6

• Helps to ensure that the
  project is completed on time and within budget
• for evaluating the financial
  performance of the project
• making decisions about future projects