Research On The Cost Management Of Y Company’s Production Line Extension Project

Since China’s reform and opening up,the national economy developed rapidly after decades of industrialization,and the manufacturing industry was grown as the largest industrial pillar of China.According to the data released by the National Bureau of Statistics,China’s industrial added value in 2020 was 38,425.5 billion CNY,accounted for 37.8%of China’s total GDP in the same period,there of the added value of manufacturing industry was about 26.2%of China’s total GDP,which means that manufacturing industry is one of the top priority of national economic development.In addition,benefit from the development of national economy,people’s per capita income and their consumption level improved continually,which triggered continuous industrial structure upgrading and changing from the previous high-speed growth mode to high-quality mode.In the process of changing to a high-quality economic model,enterprises should pay more attention to differentiated operation,cost saving,research and development investment,and product quality improvement.With these measures for high-quality and low-price product,enterprises can realize the purpose of profits and income continually increase,especially in this fierce market competition environment.As the core member of the national manufacturing industry,automobile manufacturing enterprises are the industry representatives of lean production.Generally,their production is realized through the preliminary planning and investment of production line projects,so project cost is an important measurement index for enterprises’project decision and profit realization.Therefore,improving project cost management sense and establishing cost control system are quite necessary for enterprises enhancing their competitiveness and profitability.This paper research on the cost management of Y company’s production line extension project based on cost management theory and method.Based on the description of the general situation,key points and difficulties of this project,this paper firstly determines project cost estimation through project resource analysis,work breakdown structure and project schedule.Secondly,set up project budget cost and allocate it to each sub divisional projects according to the working scope units and project target cost of Y company production line extension project.Finally,according to the regular collection of project schedule status and budget implementation status,this paper use earned value method to evaluate the deviation between project progress,actual cost and expectation,detail analyzing the specific reasons behind and exploring feasible measures to correct cost deviation,improving project cost management process,so that all controlling measures can be implemented effectively within budget and also the cost saving can be further developed.It is hoped that this research can provide reference and suggestions for enterprise project cost management and improve the cost management ability via promoting cost management awareness,furthermore,support enterprises core competitiveness against competitors and greater economic benefits with more effective cost control and reduction measures.