Key Components of a Project Budget

PMs must account for understanding stakeholder needs, budgeting for surprise expenses, maintaining adaptability, and reviewing and reforecasting throughout the entire project.

• True

• False

It's important to know exactly what stakeholders expect from this project in order to ________. As a company, the ultimate goal is typically to make a profit and to save money and time.

• deliver

• plan

As your project continues along, you'll have to review your budget and sometimes __________, which means creating a separate revised budget based on how your project is tracking.

• replan

• reforecast

Keeping on top of the budget will help you stay organized, and __________is a way to recalibrate the budget, if necessary.

• restating

• reforecasting

There are several factors to consider when creating a budget, including resource cost rates, reserve analysis, contingency budget, and cost of quality.

• True

• False

Resource cost rates are exactly what they sound like, the cost of a resource.

Some examples of resources are ______, ______, ______, ______ and ______. You'll want to ask yourself, how much will each of these resources cost the company?

• labor

• tools

• equipment

• materials

• software

A project can be derailed because the project manager didn't adequately include funds for reserves or buffers. Performing a ________ ______ will help you account for any buffer funds you may need.

• reserve analysis

• budget analysis

A _____analysis is a method to check for remaining project resources. In performing one, you'll review all potential risks to your project and determine if you need to add buffer funds.

• budget

• reserve

___________ funds are necessary because new costs that you didn't originally foresee will arise. This is also known as contingency budget.

• Buffer

• Alternative

____________ budget in project management, is money that is included to cover potentially unforeseen events that aren't accounted for in a cost estimate.

• Buffer

• Contingency