Exam 7: Determining Costs, Budget and Earned Value

A third method for determining the forecasted cost at completion is to re-estimate the costs for all the remaining work to be performed and then add this re-estimate to the cumulative actual cost.If the amount of cumulated actual costs is less than difference between the total budgeted cost and the re-estimate, then

Costs are when an item is ordered even though actual payment may take place at some later time.

Once a total budgeted cost has been established for each work package, the second step in the project budgeting process is to

It is important to manage the cash flow on a project.

It is good practice to have the person who will be responsible for the costs associated with the work make the cost estimates.

Managing cash flow involves making sure that sufficient payments are received from the customer in time so that

Costs related to are for outsourced work when the project teams or contractors do not have the expertise or resources to do certain project tasks.

The is the amount that was budgeted to achieve the work that was scheduled to be performed up to that point in time.

Calculate the forecasted cost at completion if the total budgeted cost = R100 000, the CEV is R80 000, and the CAC is R40 000.

Calculate the forecasted cost at completion if the cumulative actual cost is R100 000 and the re-estimate of remaining work to be performed is R50 000.

To keep track of , it's necessary to set up a system to collect, on a regular and timely basis, data on funds actually expended.

The key to managing cash flow is to ensure that cash comes in faster than it goes out.

A second method for determining the forecasted cost at completion assumes that, regardless of the efficiency rate the project or work package has experienced in the past, the work to be performed on the remaining portion of the project or work package will be done according to budget.If the cumulative actual cost is greater than the cumulative earned value, then

Allocating total project costs for the various elements to the appropriate work packages will establish

It is important to use the as the standard against which actual cost is compared.

Plot curves on the same graph to reveal any trends toward improving or deteriorating cost performance.

In many projects, large Rand amounts are expended for materials or services (subcontractors, consultants) that are used over a period of time longer than one cost reporting period.

Another indicator of cost performance is cost variance (CV).If the cumulative earned value is greater than the cumulative actual costs, then

Large projects would have charge codes for the work package numbers to

Travel costs in the project costs estimate are for