Free Trial

Safari Books Online is a digital library providing on-demand subscription access to thousands of learning resources.

  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint
Share this Page URL
Help

Chapter 4: Cost

Chapter 4

Cost

When considering the topic of cost, a project manager may well ask, “Doesn't the project budget cover cost?” The answer is . . . it depends! Budget, first of all, is concerned with three areas: predicting what income and expenses will be, monitoring expenses and cash flow, and producing information to predict profit and loss. Cost, however, is concerned with analyzing the source and behavior of cost, its effect on finances, and the processes used to manage cost in an optimal way.

To further illustrate the difference between budget and cost, let's look at two examples. It will become clear why we differentiate between the two.

Let's take a new product development project as an example. The project will develop a new widget, and the budget contains the information shown in Exhibit 4.1.


  

You are currently reading a PREVIEW of this book.

                                                                                                                    

Get instant access to over $1 million worth of books and videos.

  

Start a Free 10-Day Trial


  
  • Safari Books Online
  • Create BookmarkCreate Bookmark
  • Create Note or TagCreate Note or Tag
  • PrintPrint