What are the basic cost elements in project budgeting?

What are the basic cost elements in project budgeting?

• A. Estimates, budgets, and cost reporting; including direct and indirect costs, allowances, and reserves.
• B. WBS, schedule, and scope statements.
• C. Estimates, budgets, and cost baselines; including direct and indirect costs, allowances, and reserves.
• D. Risk register, stakeholder register, and communications plan.

Answer: (C)

Budgeting in project cost management revolves around transforming estimates into a spend plan. The three basic cost elements are the estimates of costs, the overall budget, and the cost baseline. Cost estimates quantify the likely resources and costs for each activity. The budget is the consolidated, approved amount to fund the project. The cost baseline is the time-phased portion of that budget used to monitor cost performance. It includes direct and indirect costs, along with allowances and reserves for identified risks, and it serves as the reference point for measuring variances between planned and actual costs. Note that management reserves are handled separately and are not part of the baseline.

Budgeting in project cost management revolves around transforming estimates into a spend plan. The three basic cost elements are the estimates of costs, the overall budget, and the cost baseline. Cost estimates quantify the likely resources and costs for each activity. The budget is the consolidated, approved amount to fund the project. The cost baseline is the time-phased portion of that budget used to monitor cost performance. It includes direct and indirect costs, along with allowances and reserves for identified risks, and it serves as the reference point for measuring variances between planned and actual costs. Note that management reserves are handled separately and are not part of the baseline.