Part Three:

Forecast Project Cost

Answer the following questions, using as much space as you need.

Refer back to the sample project examined in the project, part two, and imagine that everything is executed perfectly. You have now reached the end of time period $16.$ Activity $4-5$ is completed as scheduled, and Activity $3-6$ is also finished, two periods ahead of schedule. Resource A was expected to cost $$5,000$ per period for $7$ periods. However, the actual cost was $$6,000$ per period for $5$ periods. This means you are now ahead. In answering the questions below, remember that Resource A has a planned cost of $$5,000$ per period of use, and Resource B has a planned cost of $$3,000$ per period of use.

$1.$ What is the cost variance?

$$5$k

$2.$ What is the new forecasted total cost at completion if you use Method $1?$

Positive cost variance indicates that the project is underbudget.

Hence the new forecasted total cost at completion will be $$5000$ less than the old forecasted total cost at completion.

$=$ $$30$k

$3.$ What is the new forecasted total cost at completion if you use Method $2?$