PMP Chapter 7 - Cost

A detailed estimating approach that usually involves team input - As the team buils the pieces of the estimate, they build the total estimate from the bottom up.

Total project budget; amount of money planned to be spent by the time the project is complete; sum of all planned value (PV)

A structure used to monitor project cost that usually aligns with a company's accounting system and WBS of the project or program

A point where scope, time, budgeted cost, and actual cost come together to measure performance on a project - The control account is used at multiple interface points on the project.

The difference between what has been built (EV) and what the cost was to build it (AC); Formula: EV-AC - A value of zero (0) means the project is creating what it should for the cost as planned. A negative value means you are over budget; a positive value means you are under budget.

The process of applying the overall cost estimates to the individual work elements to allow for a baseline cost measurement

Represents the value of the work that has actually been accomplished or completed up to a particular point in time; the percent complete of each activity multiplied by the planned value; also known as budgeted cost of work performed (BCWP)

The technique associated with measuring the amount of completion of a work breakdown structure component, control account or project

The process of estimating (educated consistent process) the cost of people and other resources to complete the project activities

A theory which states that the more of something that is produced, the lower the unit cost of it becomes due to an improvement in efficiency

 The cost associated with giving up one opportunity for another (Ex: Project A $50K, Project B $75K. If you select Project B, it has an opportunity cost of the total of Project A, which is $50K.)

 Represents the total costs that should have been spent up to a particular point in time; also known as budgeted cost of work scheduled (BCWS)

Money set aside in a budget used for items that are difficult to predict; also known as contingency reserves

Ratio of earned value and planned value that can be used to calculate how a project is progressing

Graphic representation of costs, work, and other quantities over time so that the planned value, earned value, and actual cost of the work can be seen