Exam 7: Budgeting and Cost Estimation

___________ costs are not associated with any specific product or class of products and are typically charged as a fixed percentage of some direct cost.

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

If a project budget is underfunded,it will often __________.

Describe the top-down budgeting process.

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

______________ issues are present when bidders "low-ball" a bid or when some bidders get a "last look."

You have been asked to estimate the costs for a project to build an industrial power plant.Based on historical data,the steam turbine accounts for 30 percent of the total costs for the plant.If the steam turbine costs $300,000,the expected top-down estimated cost for this project would be __________.

Many lower-level managers often treat the entire budgeting process as if it were a __________,a situation in which any individual's gain is another individual's loss.This can make competition among junior managers quite intense.

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

The pattern of constraints in a budget embodies organizational __________.

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

The determination of costs for a new process should utilize a __________,or operations sequence sheet,which describes the operation in which the new process would be used.

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

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

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

Identify some of the common problems faced by the project budgeter.

__________ costs vary with output.

A budget strategy that is based on collecting the judgments and experiences of top and middle managers is referred to as the __________ approach or method.

A work element in the project plan requires 50 hours of labor each by four carpenters.The carpenters are paid $15 per hour and incur an overhead rate equal to 80 percent of their direct labor charges.Based on this data,the appropriate total cost is __________.

__________ budgeting allows income and expenditures to be aggregated across projects.