What is cost estimating?

What is cost estimating?

• A. Developing an approximation of the costs of the resources needed to complete project activities.
• B. Determining exact final costs.
• C. Scheduling project tasks.
• D. Hiring vendors.

Answer: (A)

Cost estimating is the process of developing an approximate cost for the resources needed to complete project activities. It uses information on quantities, unit costs, productivity, and risk to produce cost estimates for each activity and an overall project total. Because prices and effort can vary and there’s inherent uncertainty, these are not exact figures but reasonable estimates with stated confidence or ranges. This estimate serves as the basis for budgeting and setting the cost baseline. It’s not about final, exact costs (those come later as work is completed), it’s not about scheduling tasks, and it isn’t the act of hiring vendors, which is a procurement activity.

Cost estimating is the process of developing an approximate cost for the resources needed to complete project activities. It uses information on quantities, unit costs, productivity, and risk to produce cost estimates for each activity and an overall project total. Because prices and effort can vary and there’s inherent uncertainty, these are not exact figures but reasonable estimates with stated confidence or ranges. This estimate serves as the basis for budgeting and setting the cost baseline. It’s not about final, exact costs (those come later as work is completed), it’s not about scheduling tasks, and it isn’t the act of hiring vendors, which is a procurement activity.