22 Budgeting and Cost Control

Question 1

What are the purposes of estimates?

Answer 1

• Enable budget setting and considerations of affordability
• Support judgements about value for money for the solution chosen
• Create a resource schedule which then in turn provides the cost view of the project

Question 2

What three things should be considered when creating a budget?

Answer 2

1. The different types of costs involved and when they will need to be paid so that they can be budgeted accordingly, i.e. funding drawdowns to cover payment milestones
2. Information required from external sources, such as supplier costs, and how these align to the plan to enable budgeting
3. The assumptions being made on the project and how they underpin the cost estimates so they can be understood, validated and budgeted for