The project budget is (select 5):

(a) Is based on the activities in the WBS

(b) Includes all the funds necessary to complete the project

(c) Can be accurate regardless of how complete the WBS is

(d) Can include contingency funds

(e) Provides a view of what each deliverable will cost based on when it must be delivered

(f) Can be reduced without impacting the scope and schedule

(g) Is used to monitor and control the project during execution

Text to help answering:

Project Budget Overview

Once we have our fully developed WBS, we can begin building the Project Budget. The Project Budget is the cost element of the Triple Constraint. Costs are allocated to the project at the activity level and includes all costs associated with the completion of each activity. Additionally, a budget often times includes costs for contingency to deal with uncertainties in the project or possible changes in the project during execution. By linking costs to the activities in the project, we can establish a time phased view of the budget for the project. We began by defining our deliverables, Work Packages, and activities. We identified activity sequencing, resources, durations, and effort. By allocating our costs to each activity, we will have a fully detailed and time-phased project budget that will align to the project schedule and to the deliverables of the project scope. As such, the project budget contains all the costs and project funding necessary to complete the defined scope of work by the scheduled dates.

The Project Manager uses the Project Budget to ensure that spending is aligned to the deliverables promised at their scheduled times. Notice that all three elements of our Triple Constraint are managed together. A Project Manager does not manage a budget separate from what is being delivered and when. It is important to note at this point, that if the WBS and Activities List are incomplete, then so will be the schedule and the budget. This makes the development of the WBS and Activities List a key document in the Planning Phase. The Project Manager must take extra care to ensure that these documents are correct and complete or otherwise have a poor Project Plan to execute. This is why it is important to involve the project team and Stakeholders in the development of the WBS and Activities List as well as activity predecessors, duration, and effort estimates to ensure they are complete and accurate.

There are various techniques that can be used to determine the cost of each activity. We will explore these techniques in the next section.