Professional Documents
Culture Documents
Scope Definition
Schedule Development
Budgeting
- Costs Æ PM responsibility
Indirect costs
General & Admin (G&A)
Marketing & Sales (M&S)
Research and Development (R&D)
Initial Costs
Project office setup costs
Project insurance
Project financing
Costs incurred across the whole project duration
PM & all fixed resources
Depreciation of fixed assets
Rentals
Allocated project contingency/risk reserve
Manpower
Own resources:
Use Fully loaded rates to accommodate other
costs needed/utilized by your team:
Salaries + benefits + computer + office +
training + company car + …
Outsourced labor:
Extra costs for utilization of resources
computer + office space + training
© Knowledge 2008 Principles of Project Management 8
Direct Costs
2. Variable Costs (continued)
Subcontractors
Turn-key services (might include equipment/material
supplies)
Materials
Equipment sold in the project and constitute a part
of the final product/deliverable
Turn-key Equipment Supplies
Material consumed in the project
Machines
Depreciation of temporarily used Company assets
Rentals of tools used upon need
© Knowledge 2008 Principles of Project Management 9
Direct Costs
3. Other project-related costs
Warehousing
Transportation
Planning
7.1 Cost Estimating
7.2 Cost Budgeting
Controlling
7.3 Cost Control
2. Bottom-up estimating
Estimating the cost of individual work items and then
rolling up the costs to arrive at a project total
3. Parametric estimating
Using project characteristics (or parameters) in a
mathematical model to predict costs (e.g., price per square
foot)
1. Cost baseline
Time phased budget that will be used as a
basis against which to measure, monitor
and control the overall cost performance
on the project