Task 1: Determine Project Costs
1.1 Project budget
- a) Project budget planning
Contingencies and tolerances
We should always have a plan B for program improvement if are budget goes wrong or things do not happen according to plan so we should have a second plan for that and we have money to cover potential incidents. The tolerance that how much we can bend within our project and how much variation should be tolerated within a project for example we have a $15000 budget so we can tolerate up to $17000.
Overhead and indirect cost
An overhead cost occurs indirectly and it’s also called indirect cost. We should have some extra amount of money to cover overhead. And to achieve the organization’s goal. Overheads are in equipment and material that variances are for equipment is $1 and in material $.4.
- B) The assumptions we take while budgetary is that –
Expecting about income, expecting about expenses, problems about potential, alternation and expected and suppose income and expenditure. And it is very important to assume cost before committing resources.
1.2 Cost Management Plan
The project cost management program defines as a figure. Cost allocation, as well it gets controlling the performance of the project. Project planning has an essential part of cost management.
Cost management covers the template which is
Unit of measure: It should be right for example the value and quantity, etc. it is the first unit in cost management. That is what measure I should take in my project.
Precision level: This is the main term that keeps us away from any kind of misleading and derivations.
Level of accuracy: Accuracy is very important for each department while doing project planning.
The roles and responsibilities of an organization in cost management are also very important for both employees and workers. For achieving goals.
Threshold control: It is very necessary or important it helps to control the cost or cost management (Savitsky & Puchniak, 2019).
Measurement of performance: It helps us to determine the value we earn. And Pay employees according to their part.
Reporting format: It is very important to maintain the format in our project. Regular reporting is an important key to determining the deviation in projects related to cost.
Approval process: After our budget gets really, we have to take approval from senior authorities and show them all the projects before implementation.
Financial and delegated authority: Show them all the terms related to financial needs or projects, expenses, profit, etc.
Communication process: Communication must be clear and effective so that everyone can understand the project well. The report must be clear and easy to understand for everyone. It is professional nut friendly. And effective in archive desired goals.
Invoice procedure: Check the details of the invoice on receipt, record it in a system, and do payment after taking approval.
2.1 Cost Analysis Method
The methods of cost analysis to demonstrate the cost variation in the project is: effective cost evaluation is important for project success.
Parametric model: So, this is based on a mathematical equation in that we use old recorded data or old software, or historical data. For mathematical performance and help to demonstrate that occurs in the project (Pérez, et al., 2020).
Expert model: discuss with the expert in the project who already worked many times in that kind of project. And this is very important to discuss with experts or seniors.
2.2 Budget performance report
|Names||Budget cost||Actual cost||variance|
|Service and statutory costs||$3.5||$3||Positive|
2.3 Re-planning of project
The variances in the budget are not good for any project budget. we have to find out what are the reasons behind these variances, we need to identify the reasons for variance and an effective plan to bring back the project according to plan. The equipment we have purchased is expensive we should buy the equipment according to needs of a project and understood worker so they use it an effective manner don’t they use it a harsh manner so that they break, material and other expenses are being fully checked and preplan is important according to budget only expenses should be made.
For the back project on the back we have to use a technique like:
Reviewing the situations
Problems are too solved and clear.
The action plan should be developed and implement
The high-performance team should be there.
3.1 Financial completion activity
At the end of the project, a financial activity needs to undertake first gather the records of the project: Spread in the establishment and approve acceptance of the product, service, or project. As a manager, I’ll have to review the documents of the project to be sure that they are up to date and check the overall project and check if some changes and alternations are needed or not. And have to double-check all the resources of the project and don’t forget to update as well (Bodiako, et al., 2016). Prepare the balance sheet, liberate the project team and make the final payments.
3.2 Project performance review
I reviewing my performance of the project in terms of cost management. First, regulate how to do every task in the form of a percentage. Establish plan value. I make sure that everything related to cost is done in an effective manner and compared my desired plan with my actual plan. Cost management is an effective method of implementation as well as provides the resources and process it ensures the high possible degree of quality, and also for overall productivity.
3.3 Cost issues and recommendations
|Date||Description of problem/opportunity||Recommended Action for next time/project||Lesson Learnt Raised By|
|25 April 2022||Shortage of resources||Make sure that we have resources in advance so the shortage can be solved.||This raised by the project or resource team.|
|30 April 2022||overhead||Overhead is a really concern matter we have to make sure that we should have a money in an accurate manner.||By cost and budget department.|
|4 may 2022
|Shortage of labor||Without labor we can’t do our projects in our next project we make sure that we have another labor team in advance.||This is raised by the labor’s head.|
|29 April 2022||Internet is not working||If the internet is not working we must a second option like Wi-Fi or another internet option.||By project designing and computer team.|
|2 May 2022||Light cut||Without light we can’t work company should have a proper generator system. In the absence of electricity.||By assistant manager.|
Bodiako, A. V., Ponomareva, S. V., Rogulenko, T. M., Karp, M., Kirova, E., Gorlov, V., & Burdina, A. (2016). The goal setting of internal control in the system of project financing. International journal of economics and financial issues, 6(4), 1945-1955.
Lindhard, S., & Larsen, J. K. (2016). Identifying the key process factors affecting project performance. Engineering, construction and architectural management.
Pérez, V., Klemen, M., López-García, P., Morales, J. F., & Hermenegildo, M. (2020, November). Cost analysis of smart contracts via parametric resource analysis. In International Static Analysis Symposium (pp. 7-31). Springer, Cham.
Savitskyi, A., & Pikhniak, T. (2019). METHODOLOGICAL APPROACH TO COST MANAGEMENT IN PURCHASING ACTIVITIES: SAVINGS PLAN AND ITS IMPLEMENTATION. Moderní věda, 76.