ACCT 301: Cost Planning
Archiverr Resource Center
Accounting Practice Essay
Advantages and disadvantages of Elemental Cost Planning
The estimate can then be compared with subsequent estimates or actual
costs as the project moves forward using an elemental cost plan since the
calculation is first broken down into several pieces. The Building Cost Information
Service (BCIS) creates the element breakdown that is the most popularly used and
extensively used for construction projects. It is common practice to consider each
component a separate cost center; nevertheless, moving money from one
element to another is permissible so long as a suitable equilibrium is maintained
between components and the overall budgetary goal is not surpassed. The first
cost plan will most likely be based on approximations of actual costs; they may
serve as a good foundation for evaluating the accuracy of subsequent estimates.
The project manager maintains control by comparing cost projections for
each cost center to the budgetary allocations they represent. Any cost deviation
from the cost plan is uncovered as the design progresses and expenditures are
tallied. After that, decisions are made on whether or not the cost of that
Archiverr Resource Center
Accounting Practice Essay
Advantages and disadvantages of Elemental Cost Planning
The estimate can then be compared with subsequent estimates or actual
costs as the project moves forward using an elemental cost plan since the
calculation is first broken down into several pieces. The Building Cost Information
Service (BCIS) creates the element breakdown that is the most popularly used and
extensively used for construction projects. It is common practice to consider each
component a separate cost center; nevertheless, moving money from one
element to another is permissible so long as a suitable equilibrium is maintained
between components and the overall budgetary goal is not surpassed. The first
cost plan will most likely be based on approximations of actual costs; they may
serve as a good foundation for evaluating the accuracy of subsequent estimates.
The project manager maintains control by comparing cost projections for
each cost center to the budgetary allocations they represent. Any cost deviation
from the cost plan is uncovered as the design progresses and expenditures are
tallied. After that, decisions are made on whether or not the cost of that
