Determine Budget
Determine Budget is the process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.
Explanation
Determine Budget takes the activity cost estimates and aggregates them into work package costs, then into control account costs, and finally into the total project cost baseline. The cost baseline is the approved version of the time-phased project budget, excluding management reserves.
Key inputs to this process include the cost management plan, scope baseline (project scope statement, WBS, and WBS dictionary), activity cost estimates, basis of estimates, project schedule, resource calendars, risk register, agreements, and organizational process assets.
The primary outputs are the cost baseline, project funding requirements, and project document updates. The cost baseline serves as the reference point for measuring and monitoring cost performance. The project budget equals the cost baseline plus management reserves.
Key Points
- •Aggregates cost estimates to establish the cost baseline
- •Cost baseline is the approved time-phased project budget
- •Project budget = cost baseline + management reserves
- •Funding requirements are also determined in this process
Exam Tip
Determine Budget produces the cost baseline and funding requirements. Remember the equation: Project Budget = Cost Baseline (includes contingency reserves) + Management Reserves.
Frequently Asked Questions
Related Topics
Cost Baseline
The cost baseline is the approved version of the time-phased project budget, excluding management reserves, used as a reference for measuring and monitoring cost performance.
Project Budget
The project budget is the total authorized funds allocated for the project, composed of the cost baseline plus management reserves.
Funding Requirements
Funding requirements define the total and periodic funding needs derived from the cost baseline, including projected expenditures plus anticipated liabilities.
Estimate Costs
Estimate Costs is the process of developing an approximate monetary assessment of the resources needed to complete project activities.
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Part of
Cost Management
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