Financial Management: Target Cost Management Skills

Target cost management is a management concept based on the target cost method and target cost. It is a system for enterprises to implement target cost control.

Target cost management refers specifically to enterprises in cost management activities, the cost objective from the enterprise target system to extract and highlight, use it to guide, plan and control the cost of the occurrence and expenses, so as to achieve the purpose of reducing cost and increasing capital efficiency.

Generally speaking, target cost management includes cost prediction, cost decision, cost plan, cost control, cost accounting, cost analysis, cost check, cost assessment, cost reward and penalty incentive.

The target cost of a construction project is the expected value of all the cost incurred by the construction product that the quality standard of the general contract is completed.

The target cost management of the construction project is based on the characteristics of the construction production of the construction enterprise, combined with the composition of the project price and the area where the cost takes place, and through the plan, the expenses incurred in the implementation of the project under the premise of meeting the contract requirements of the project quality and construction period, etc.

Control, coordination and other activities to achieve predetermined cost objectives, as far as possible to reduce project cost.

The method is

In the process of formulating the idea of value engineering and activity based costing, the objective cost needs to be coordinated with value engineering and activity based costing to jointly manage and control cost.

The research process of cost engineering applying value engineering theory in construction projects is divided into three stages, namely, research preparation stage, formal research stage and post research stage.

In the construction process of construction projects

The main contents of the application of value engineering theory are as follows:

1, through the application of value engineering theory, technical and economic analysis is carried out to determine the best construction plan.

2. Combined with the construction method, the material is used for comparison and selection. Under the premise of meeting the functional requirements, the material consumption is reduced by substitution, changing the mix proportion and using additives.

3, combined with the construction method, choose the most suitable equipment for mechanical equipment selection.

4, through the application of value engineering theory, combined with the project's construction organization design and the natural geographical conditions of the locality, the inventory cost and pportation cost of materials are reduced, and the most reasonable material reserves are determined.

The application of value engineering theory to cost control in construction projects is practical and feasible. According to the different characteristics and requirements of engineering projects, the research emphasis should be put on technical and economic analysis through the application of value engineering theory, and the best construction plan can be determined in order to improve product function and reduce product cost.

Through empirical analysis, we can clearly see that the application value engineering theory has great potential for high efficiency and saving, not only can improve the quality of construction quality, but also greatly speed up the construction schedule.