accountants usually define ____ as a resource sacrificed or foregone to achieve a specific objective or something given up in exchange
cost
what is the main goal of a project cost management
to complete a project within an approved budget
what are outputs of the project mgmt. process called "estimating costs" according to PMBOK
activity cost estimates, basis of estimates, project documents updates
if a company loses $5 for every $100 in revenue for a certain product, what is the profit margin for that product?
-5%
____ reserves allow for future situations that are unpredictable
management
you are preparing a cost estimate for a building based on its location, purpose, number of square feet and other characteristics. what cost estimating technique are you using?
parametric
____ involved allocating the project cost estimate to individual material resources or work items over time
project cost budgeting
___ is a project performance measurement technique that integrates scope, time and cost data
earned value management
If the actual cost for a WBS item is $1500 and its earned value is $2000, what is the cost variance, and is it under or over budget?
the cost variance is $500 and is under budget
if a project is halfway completed, its schedule performance index is 110 percent and its cost performance index is 95 percent, how is it progressing?
it is ahead of schedule and over budget
actual cost
the total of direct and indirect costs incurred in accomplishing work on an activity during a given period
analogous estimates
a cost estimating technique that uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project; also called top down estimates
baseline
the original project plan plus approved changes
bottom up estimates
a cost estimating technique based on estimating individual work items and summing them to get a project total
budget at completion (BAC)
the total original budget for a project
budgetary estimate
a cost estimate used to allocate money into an organization's budget
cash flow analysis
a method for determining the estimated annual costs and benefits for a project
contingency reserves
dollar amounts included in a cost estimate to allow for future situations that may be partially planned for (sometimes called known unknowns) and that are included in the project cost baseline
cost baseline
a time phased budget that project managers use to measure and monitor cost performance
cost performance index (CPI)
the ratio of earned value to actual cost; can be used to estimate the projected cost to complete the project
cost variance (CV)
the earned value minus the actual cost
definitive estimate
a cost estimate that provides an accurate estimate of project costs
direct costs
costs that can be directly related to creating the products and services of the project
earned value (EV)
an estimate of the value of the physical work actually completed
earned value management (EVM)
a project performance measurement technique that integrates scope, time and cost data
estimate at completion (EAC)
an estimate of what it will cost to complete the project based on performance to date
indirect costs
costs that are not directly related to the products or services of the project, but are indirectly related to performing the project
intangible costs or benefits
costs or benefits that are difficult to measure in monetary terms
known unknowns
dollar amounts included in a cost estimate to allow for future situations that may be partially planned for (sometimes called contingency reserves) and that are included in the project cost baseline
learning curve theory
a theory that when many times are produced repetitively, the unit cost of those items normally decreases in a regular pattern as more units are produced
life cycle costing
the total cost of ownership, or development plus support costs, for a project
management reserves
dollar amounts included in a cost estimate to allow for future situations that are unpredictable (sometimes called unknown unknowns)
overrun
the additional percentage or dollar amount by which actual costs exceed estimates
parametric estimating
a cost estimating technique that uses project characteristics (parameters) in a mathematical model to estimate project costs
planned value (PV)
the portion of the approved total cost estimate planned to be spent on an activity during a given period
profit margin
the ratio between revenues and profits
profits
revenues minus expenses
project cost management
the processes required to ensure that the project is completed within the approved budget
rate of performance (RP)
ratio of actual work completed to the percentage of work planned to have been completed at any given time during the life of the project or activity
reserves
dollar amounts to be included in a cost estimate to mitigate cost risk by allowing for future situations that are difficult to predict
rough order of magnitude (ROM) estimate
a cost estimate prepared very early in the life of a project to provide a rough idea of what a project will cost
schedule performance index (SPI)
the ratio of earned value to planned value; can be used to estimate the projected time to complete a project
schedule variance (SV)
the earned value minus the planned value
sunk cost
money that has been spent in the past
tangible costs or benefits
costs or benefits that can be easily measured in dollars
top down estimates
cost estimating technique that uses the actual cost of a previous, similar project as the basis for estimating the cost of the current project; also called analogous estimates
unknown unknowns
dollar amounts included in a cost estimate to allow for future situations that are unpredictable (aka management reserves)