CCC Cost Estimation & Budgeting Flashcards

What is the primary goal of cost estimation in project management?

Answer: To allocate financial resources accurately

Cost estimation helps determine the financial resources required for a project, ensuring feasibility and budget adherence.

Which cost estimation technique is based on historical data?

Answer: Analogous estimating

Analogous estimating uses past project data to estimate costs for similar current projects, improving accuracy in budgeting.

What is the purpose of a contingency reserve in a project budget?

Answer: To cover unforeseen project expenses

A contingency reserve accounts for unforeseen costs, reducing financial risks and ensuring project stability.

Which budgeting method assigns costs based on specific project activities?

Answer: Activity-based budgeting (ABB)

Activity-based budgeting (ABB) assigns costs based on project activities, improving cost efficiency and resource allocation.

Which factor can significantly impact project cost estimation?

Answer: Fluctuating material costs

Fluctuating material costs can influence the accuracy of cost estimation, requiring regular adjustments to maintain budget accuracy.

What is a key advantage of using parametric estimating?

Answer: It increases accuracy using statistical data

Parametric estimating improves cost accuracy by using statistical data and mathematical models to estimate project expenses.