Podcast
Questions and Answers
What kind of costs cannot be specifically identified to a project but can be linked to a project and assigned based on usage or consumption?
What kind of costs cannot be specifically identified to a project but can be linked to a project and assigned based on usage or consumption?
- G&A Costs
- Indirect Costs
- Direct Costs
- Service Costs (correct)
Which element identifies the components requiring resources for a project to achieve successful completion?
Which element identifies the components requiring resources for a project to achieve successful completion?
- Cost Management Plan
- Cost Baseline
- Work Breakdown Structure (WBS) (correct)
- Resource Planning
What type of costs benefit all activities but cannot be related to a specific project?
What type of costs benefit all activities but cannot be related to a specific project?
- G&A Costs (correct)
- Direct Costs
- Service Costs
- Indirect Costs
In cost management, what does resource planning determine?
In cost management, what does resource planning determine?
Which element serves as the primary input for resource planning in a project?
Which element serves as the primary input for resource planning in a project?
Which costs are directly related to a project and can be specifically identified with that project?
Which costs are directly related to a project and can be specifically identified with that project?
What is the main purpose of Bottom-Up Estimating?
What is the main purpose of Bottom-Up Estimating?
Which of the following is included in the Supporting Detail of Cost Estimates?
Which of the following is included in the Supporting Detail of Cost Estimates?
What does the Cost Management Plan describe?
What does the Cost Management Plan describe?
In Cost Budgeting, what are the main inputs used?
In Cost Budgeting, what are the main inputs used?
What is the key function of Work Breakdown Structure (WBS)?
What is the key function of Work Breakdown Structure (WBS)?
What is the purpose of establishing a Cost Baseline in a project?
What is the purpose of establishing a Cost Baseline in a project?
What is the purpose of a Work Breakdown Structure (WBS) in cost estimating?
What is the purpose of a Work Breakdown Structure (WBS) in cost estimating?
Which of the following elements need to be identified before forecasting cost estimates?
Which of the following elements need to be identified before forecasting cost estimates?
What is an essential aspect of accurate cost estimating in a project?
What is an essential aspect of accurate cost estimating in a project?
How does the lack of knowledge about resource rates impact cost estimating?
How does the lack of knowledge about resource rates impact cost estimating?
Why are Activity Duration Estimates crucial for cost estimation?
Why are Activity Duration Estimates crucial for cost estimation?
Which element plays a significant role in tabulating the overall project cost?
Which element plays a significant role in tabulating the overall project cost?
Study Notes
Cost Management
- Costs are categorized into direct, indirect, and service costs, with direct costs being specifically identifiable to a project.
- Indirect costs include service costs, which cannot be specifically identified to a project, and general and administrative (G&A) costs, which benefit all activities.
- Service costs are linked to a project and are assigned based on usage or consumption, such as an automatic data processing system.
- G&A costs are not specific to a project, but benefit all activities, such as financial management, security, or legal activities.
Resource Planning for Cost Management
- Resource planning determines the physical resources needed to complete a project and evaluates their value to the organization.
- Resource planning is directly related to cost management, as all resources cost the organization something, whether monetary funds or time.
- Elements to research before making a cost management assessment include the work breakdown structure (WBS), bottom-up estimating, and computerized tools.
Cost Estimating
- Cost estimating involves predicting the cost of work items and summing the estimates to get a project total.
- Accurate cost estimating requires supporting detail, including:
- A description of the scope.
- Documentation of the basis for the estimate.
- Documentation regarding any assumptions made.
- The range of possible results (plus or minus amounts).
- Cost estimating inputs include the work breakdown structure (WBS), resource requirements, resource rates, and activity duration estimates.
Cost Budgeting
- Cost budgeting involves allocating cost estimates to specific accounts within the organization to establish a baseline.
- The main inputs of cost budgeting are the cost estimates of a project, WBS, and project schedule.
- Cost estimates may be refined throughout the project.
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Description
what is strategic cost management? What stages, different costs, types of cost management, and components of strategic cost management?
