Costs

Types of Costs

•Direct Costs

–Costs that are clearly chargeable
to a specific work package.

•Labor, materials, equipment, and other

•Direct (Project) Overhead Costs

–Costs incurred that are directly tied to an identifiable project deliverable or work package.

•Salary, rents, supplies, specialized machinery

•General and Administrative Overhead Costs

–Organization costs indirectly linked to a specific package that are apportioned to the project

•Reasons for Adjusting Estimates

–Interaction costs are hidden in estimates.

–Normal conditions do not apply.

–Things go wrong on projects.

–Changes in project scope and plans.

•Adjusting Estimates

–Time and cost estimates of specific activities are adjusted as the risks, resources, and situation particulars become more clearly defined.