included in the overall project budget. Unless these costs are accounted for, the project manager and the organization will not know the true cost of the project.

Cost Estimation

Estimating the cost of a particular activity or task with an estimated duration involves five steps:

1. Defining what resources will be needed to perform the work

2. Determining the quantity of resources that are needed

3. Defining the cost of using each resource

4. Calculating the cost of the task or activity

5. Ensuring that the resources are leveled, that is, resources have not been over allocated

For example, let's suppose that we have identified a particular task and estimated that it will take one day to complete and requires one project team member. Let's also assume, for simplicity, that no other resources are needed.

This estimate may require that we define a cost for using this particular resource. For example, if our team member earns $20 an hour, that sum is what our employee sees on his or her paycheck (before taxes and other deductions). The organization,




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Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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