Question - Estimate cost

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sunildubai15
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Question - Estimate cost

Postby sunildubai15 Fri Dec 18, 2015 1:59 pm

Martin, project manager is in planning phase for his project. Team is estimating cost for project. What is true?

Estimate cost should always include all direct costs and indirect costs

Estimate cost should include all direct and/or indirect costs based on what Steering Group approves and should be documented

Estimate cost should include direct and indirect cost or either of them based and assumption made should be documented

Estimate cost should include direct and indirect cost or either of them as described in project charter
ujjal_show
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Re: Question - Estimate cost

Postby ujjal_show Sat Dec 19, 2015 9:55 am

Estimate cost should always include all direct costs and indirect costs -correct.

Estimate cost should include all direct and/or indirect costs based on what Steering Group approves and should be documented, incorrect phrase "Steering Group approves"

Estimate cost should include direct and indirect cost or either of them based and assumption made should be documented, incorrect phrase " either of them"

Estimate cost should include direct and indirect cost or either of them as described in project charter, incorrect phrase "described in project charter"
jyotimayank
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Re: Question - Estimate cost

Postby jyotimayank Wed Nov 15, 2017 7:11 am

The correct answer is option C. While estimating cost for the project, PM has to make an assumption on if indirect costs need to be part of estimates. There is no mandatory guideline for including or excluding indirect cost. Project charter does not have any guideline on estimate cost. Unless PM wants to approach SG for approval there is no mandate for Steering Group (SG) to approve. Usually, document accounting procedure in the organization would help PM to know how to deal with indirect cost. Refer Page 202 of PMBOK®
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