Control Costs
Control Costs is the process of monitoring the status of the project to update project costs and managing changes to the cost baseline.
Explanation
Control Costs involves measuring actual cost performance against the cost baseline, analyzing variances, forecasting future cost performance, and taking corrective action when necessary. It is primarily concerned with ensuring that expenditures do not exceed the authorized funding and that cost changes are managed through integrated change control.
Key activities include monitoring cost expenditures against funds committed, preventing unapproved changes from being included in cost or resource usage reports, informing stakeholders of approved changes and associated costs, and bringing expected cost overruns within acceptable limits.
Earned value management (EVM) is a primary tool used in Control Costs. EVM integrates scope, schedule, and cost measures to assess project performance and progress. The process also produces work performance information, cost forecasts, change requests, and updates to the project management plan and project documents.
Key Points
- •Monitors cost performance and manages changes to the cost baseline
- •Uses earned value management as a primary tool
- •Produces cost forecasts and work performance information
- •Ensures changes go through integrated change control
Exam Tip
Control Costs is where EVM is applied. Know that this process compares actual costs to the cost baseline and produces forecasts like EAC and ETC.
Frequently Asked Questions
Related Topics
Earned Value Management (EVM)
Earned Value Management (EVM) is a methodology that integrates scope, schedule, and cost data to assess project performance and progress objectively.
Cost Baseline
The cost baseline is the approved version of the time-phased project budget, excluding management reserves, used as a reference for measuring and monitoring cost performance.
Cost Variance (CV)
Cost Variance (CV) is an EVM metric that measures cost performance as the difference between earned value and actual cost: CV = EV - AC.
Estimate at Completion (EAC)
Estimate at Completion (EAC) is the expected total cost of completing all work, calculated by projecting current performance into the future.
Test your knowledge
Practice scenario-based questions on this topic with detailed explanations.