What is cost of project?

The cost of project represents the total of all items of

outlay associated with long-term fields.

Land and Site Buildings and Civil Plant and

Development Works Machinery

Expenses on Foreign
Technical know-how
Technicians and Miscellaneous Fixed
and Engineering
Training of Assets
Fees
Technicians Abroad

Preliminary and
Pre-operative Provision for
Capital Issue
Expenses Contingencies
Expenses
 DIRECT VERSUS INDIRECT COSTS

Direct Costs are those clearly assigned

to the aspect of the project that
generated the cost. Labor and materials
may be the best examples. Direct cost
is totally traceable to the production of
a specific item
Indirect Costs are costs used by
multiple activities, and which cannot
therefore be assigned to specific cost
objects
 RECURRING VERSUS NONRECURRING COSTS

Recurring Costs are those that Nonrecurring Costs might be those

typically continue to operate over the
project’s life cycle. Most labor,
material, logistics, and sales costs are
considered recurring
associated with charges applied once at
the beginning or end of the project,
such as preliminary marketing analysis,
personnel training, or outplacement
services
 FIXED VERSUS VARIABLE COSTS

Fixed Costs, as their title suggests, do
not vary with respect to their usage. It
is a cost that does not change over the
short-term, even if a business
experiences changes in its sales volume
or other activity
Variable Costs are those that
accelerate or increase through usage;
that is, the cost is in direct proportion to
the usage level
 NORMAL VERSUS EXPEDITED COSTS

Normal Costs refer to those incurred in
the routine process of working to
complete the project per the original,
planned schedule agreed to by all
project stakeholders at the beginning of
the project
Expedited Costs are unplanned costs
incurred when steps are taken to speed
up the project’s completion. For
example- use of overtime, hiring
additional temporary workers,
contracting with external resources or
organizations for support
 Means of Finance

To meet the cost of the project, means of finance

are:

1.Share Capital
2.Term loans
3.Debenture capital
4.Deferred capital
5.Miscellaneous sources