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  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 13FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 1

    A Guide to the

    PROJECT MANAGEMENT

    BODY OF KNOWLEDGE

    (PMBOK GUIDE ) Sixth edition

    Chapter 7 Project Cost Management

    PMBOK is a registered mark of the Project Management Institute, Inc

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 2 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 2

    Project Cost Management. *Project Cost Management includes the processes involved in planning, estimating, budgeting, financing, funding, managing, and controlling costs so the project can be completed within the approved budget.

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 33FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 3

    Topic

    A cost that does not change with an increase or decrease in the amount of goods or services produced.

    Fixed Cost

    Ge

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    ral C

    on

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    ts

    Description

    Costs that vary depending on a company's production volume; they rise as production increases and fall as production decreases

    Variable Cost

    A price that can be completely attributed to the production of specific goods or services.

    Direct Cost

    Costs that are not directly accountable to a cost object (such as a particular project, facility, function or product).

    Indirect Cost

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 43FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 4

    Topic

    In economics and business decision-making, a sunk cost is a cost that has already been incurred and cannot be recovered.

    Sunk Cost

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    ts

    Description

    The process of identifying and documenting all the costs involved over the life of an asset is known as Life Cycle Costing (LCC).

    Lifecycle Cost

    The loss of other (highest) alternatives when one alternative is chosen.Opportunity Cost

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 53FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 5

    Topic

    Value engineering (VE) is a systematic method to improve the "value" of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore be increased by either improving the function or reducing the cost.

    Value Engineering

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    on

    cep

    ts

    Description

    Cost escalation is defined as changes in the cost or price of specific goods or services in a given economy over a period.

    Cost Escalation

    In economics, inflation is a sustained increase in the general price level of goods and services in an economy over a period of time.

    Inflation

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 63FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 6

    Chapter 7

    7.1 Plan Cost Management

    7.2 Estimate Costs

    7.3 Determine Budget

    7.4 Control Costs

    Project Cost Management

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 7 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 7

    7.1 Plan Cost Management. *The process of defining how the project costs will be estimated, budgeted, managed, monitored, and controlled.

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 83FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 8

    7.1 Plan Cost Management (ITTO)

    Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Sixth Edition, Project Management Institute Inc., 2017, Fig. 7-2, Page 235.

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 9 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 9

    7.2 Estimate Costs. The process of developing an approximation of the monetary resources needed to complete project work.

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 103FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 10

    7.2 Estimate Costs (ITTO)

    Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Sixth Edition, Project Management Institute Inc., 2017, Fig. 7-4, Page 240.

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 11 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 11

    7.3 Determine Budget. *The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 123FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 12

    7.3 Determine Budget (ITTO)

    Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Sixth Edition, Project Management Institute Inc., 2017, Fig. 7-6, Page 248.

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 13 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 13

    In bottom-up cost aggregation, individual activities are added up, or aggregated.

    Example: Cost Aggregation

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 14 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 14

    Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Sixth Edition, Project Management Institute Inc., 2017, Fig. 7-8, Page 255.

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.com

    online@3foldtraining.com

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 15 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 15

    Project Management Institute, A Guide to the Project Management Body of Knowledge, (PMBOK Guide) Sixth Edition, Project Management Institute Inc., 2017, Fig. 7-9, Page 255.

    Cost Baseline, Expenditures, and Funding Requirements

    3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 16 3FOLD Education Centre . All rights reserved . online@3foldtraining.com . www.3foldtraining.com . PMP Exam Review Slide # 16

    7.4 Control Costs. *The process of monitoring the status of the project to update the project costs and manage changes to the cost baseline.

  • Abu Dhabi : 02-6670660Dubai: 04-3574622

    www.3foldtraining.comwww.pmexamstudy.

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