Creating a Budget and Cost Baseline

Use the information provided for the EspressoFix Bar project and answer the following question: about creating a budget and cost baseline.

1. What are three inputs into the Cost Budgeting process?

2. What are three common techniques used to create cost estimates and cost budgets?

3. What are managerial reserves?

4. A cost baseline is a copy of the budget prior to work beginning on your project. Why do you keep a cost baseline?

5. A cost baseline does not include

6. A cost baseline is also known as

7. How long is this project?

8. You have decided to not apply any managerial reserves to this project. What is the total budget? Why?

9. What is the cost baseline? Why?

Answers

1. Cost estimates, WBS, and project schedule are three inputs into the Cost Budgeting proc

2. Analogous estimating, parametric modeling, and bottom-up estimating are three commo techniques that are used to create cost estimates and cost budgets.

3. Managerial reserves are additional monies put away to cover situations that are impossib predict. These funds are usually controlled by upper management but are available to th project manager if the need arises. These monies are not used to fund bad cost estimate

4. One reason you should keep a cost baseline is for comparison purposes. You may also i later for analysis and future forecasts.

5. A cost baseline does not include managerial reserves and fees.

6. A cost baseline is also known as planned value (PV).

7. This is a 90-day project.

8. You create the total budget by adding all of the definitive estimates. Since no managerial reserves have been applied to the project, the total budget is $165,400.

9. The cost baseline is the total project budget minus the managerial reserve. Since this pro does not have a managerial reserve, the cost baseline is $165,400.

Team LiB

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Project Management Made Easy

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