What term describes a compilation of cost estimating logic that aggregates details into a total estimate?

What term describes a compilation of cost estimating logic that aggregates details into a total estimate?

• A. Cost Model
• B. Cost Management
• C. Cost Management Plan
• D. Budgeting

Answer: (A)

A cost model is the structured framework that captures all the estimating logic and the relationships between quantities, unit costs, labor rates, materials, equipment, overhead, and contingencies to roll up individual line items into a single total estimate. It provides the rules and calculations used to aggregate details into the overall project cost and lets you see how changes in assumptions affect the total. This is different from cost management, which is the ongoing process of planning, controlling, and reporting costs; a cost management plan, meanwhile, is the document that describes how those cost activities will be carried out; budgeting is the step of setting the cost baseline by converting the estimate into an approved spending plan. Because it specifically represents the compiled estimating logic that produces the total figure, the correct term is cost model.

A cost model is the structured framework that captures all the estimating logic and the relationships between quantities, unit costs, labor rates, materials, equipment, overhead, and contingencies to roll up individual line items into a single total estimate. It provides the rules and calculations used to aggregate details into the overall project cost and lets you see how changes in assumptions affect the total. This is different from cost management, which is the ongoing process of planning, controlling, and reporting costs; a cost management plan, meanwhile, is the document that describes how those cost activities will be carried out; budgeting is the step of setting the cost baseline by converting the estimate into an approved spending plan. Because it specifically represents the compiled estimating logic that produces the total figure, the correct term is cost model.