Cost management Flashcards
3 types of estimating
1 - Historical 2 - Bottom-up 3 Parametric
3 important principles of money management
1 - Budgeting 2 - Invoicing 3 - Tax
2 types of costing
1 - Direct 2 - Indirect
Define direct costs
Direct costs are costs that can be directly attributed to a specific project
3 example of direct costs
1 - Labour
2 -Raw materials
3 - Equipment
3 example of indirect costs
1 - General administration
2 - Rental
3 - Utility costs
Define indirect costs
Indirect costs are costs that cannot be directly attributed to a specific project
Debit / Credit framework formula
A = L + SE (Assets = Liabilities + Stakeholders Equity)
BCWS
Budget Cost Work Schedule
Formula
Planned value
PV = planned % complete X BAC
Formula
Cost variance (CV)
CV = EV - AC
Cost variance = Earned value - Actual cost
ACWP
Actual Cost Work Performed
Which formula to calculate if project is on schedule or not?
CV = EV - AC
Earned Value = Lower) - (AC = higher
How to determine if project is on budget?
1 - Calculate time spent by max time allowed
2 - Compare the calculated variable with cost spent
3 - Determine if project is behind or ahead of schedule
What is a simplified explanation of Earned Value (EV) in a project
An unexpected cost that occurs that was not mentioned in the original cope of the project
