While planning a project, the project team estimates known expenses but also applies a margin of error for unknown expenses. Which of the following is the project team trying to determine?

The correct answer is C. Total project cost. The project team is trying to determine the total project cost. This process involves identifying all known (defined) costs and adding contingency reserves or buffers to account for unknown or uncertain expenses. The combination of estimated known costs plus a margin of error…

Project management concepts

Question

While planning a project, the project team estimates known expenses but also applies a margin of error for unknown expenses. Which of the following is the project team trying to determine?

Options

ACost of quality
BExpenditures
CTotal project cost
DBurn rate

How the community answered

(56 responses)

A
4% (2)
B
13% (7)
C
80% (45)
D
4% (2)

Explanation

The project team is trying to determine the total project cost. This process involves identifying all known (defined) costs and adding contingency reserves or buffers to account for unknown or uncertain expenses. The combination of estimated known costs plus a margin of error for unknowns gives the overall total project cost. Cost of quality (A) refers specifically to the cost of conformance/non-conformance activities. Expenditures (B) refers to money already spent, not planned estimates. Burn rate (D) is the rate at which a project spends its budget over time, not a planning estimate.

Topics

#cost estimation#contingency reserve#budget planning#total project cost

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