Bottom-Up Estimating Quiz and Flashcards: Which Statement is True?

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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?

G&A Costs

Indirect Costs

Direct Costs

Service Costs (correct)

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?

G&A Costs (correct)

Direct Costs

Service Costs

Indirect Costs

In cost management, what does resource planning determine?

Physical resources needed for the project Signup and view all the answers

Which element serves as the primary input for resource planning in a project?

Work Breakdown Structure (WBS) Signup and view all the answers

Which costs are directly related to a project and can be specifically identified with that project?

Direct Costs Signup and view all the answers

What is the main purpose of Bottom-Up Estimating?

To estimate the total cost of the project by summing up individual work item estimates. Signup and view all the answers

Which of the following is included in the Supporting Detail of Cost Estimates?

Documentation regarding any assumptions made. Signup and view all the answers

What does the Cost Management Plan describe?

How cost variations will be controlled. Signup and view all the answers

In Cost Budgeting, what are the main inputs used?

The cost estimates of a project. Signup and view all the answers

What is the key function of Work Breakdown Structure (WBS)?

To identify the project elements that will cost money or time. Signup and view all the answers

What is the purpose of establishing a Cost Baseline in a project?

To track and manage cost variations throughout the project. Signup and view all the answers

What is the purpose of a Work Breakdown Structure (WBS) in cost estimating?

To organize cost estimates and ensure all work that will cost money is accounted for Signup and view all the answers

Which of the following elements need to be identified before forecasting cost estimates?

Work Breakdown Structure (WBS) and Resource Requirements Signup and view all the answers

What is an essential aspect of accurate cost estimating in a project?

Utilizing a Work Breakdown Structure (WBS) Signup and view all the answers

How does the lack of knowledge about resource rates impact cost estimating?

It requires professional manner predictions Signup and view all the answers

Why are Activity Duration Estimates crucial for cost estimation?

They predict how much time will be expended by the organization Signup and view all the answers

Which element plays a significant role in tabulating the overall project cost?

Resource Requirements Signup and view all the answers

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.