Exam 7: Budgeting and Cost Estimation

If projects include repetitive tasks with significant human input, the __________ rate should be factored into the cost estimate.

A work element whose cost is fully developed would __________.

A possible reason for the poor record of project cost overruns is __________.

The authors identify __________ estimation errors as the two types of generic estimation errors.

The __________ form of budgeting has the advantage of using individuals closer to the work to provide estimates of resource requirements.

__________ budgeting aggregates income and expenditures by project or program, often in addition to aggregation by organizational unit or activity.

The __________ charge is composed of the costs of senior management, the various data functions, and any other expenses not included in overhead. Often, these charges are a fixed percentage of either the direct costs or the total of all direct and indirect costs.

Suggest some reasons why the authors insist that the project manager must be familiar with the organization's accounting system.

Explain why senior managers view the bottom-up budgeting process as being risky.

__________ states that adding manpower to a late software project makes it later.

If a project budget is over funded, it will often __________.

In order to develop a budget, the PM must forecast __________.

The traditional organizational budget is __________.

Suppose that a person requires eight hours to complete a work element on the first attempt. That person has a learning rate of 90 percent for this work element. This person should require __________ hours to complete this work element on the fourth attempt.

__________ costs vary with output.

Research suggests that lower level managers and project team members believe that senior managers have a strong bias towards __________ cost.

Describe the bottom-up budgeting process.

Given a project salary cost of $400,000 per year and forecasted wage increases of 5 percent per year, calculate the nondiscounted total salary cost over a three-year project lifecycle.

A __________ is a plan for allocating resources. The allocation of resources indicates the degree to which different activities of an organization are fully supported.

Unless the project manager is familiar with the firm's __________ it will be very difficult to exercise budget control.