Do you need customer support or technical assistance? Click here to submit a support ticket...

TOPIC: What is the difference between cost estimates and the project budget?

What is the difference between cost estimates and the project budget? 1 week 1 day ago #22590

  • Lisa Long
  • Lisa Long's Avatar Topic Author
  • Offline
  • Fresh Boarder
  • Fresh Boarder
  • Posts: 1
  • Thank you received: 0
I'm struggling with what makes these different and needing some expert advice to clarify. It feels like the estimates and budget are the same thing?

What is the difference between cost estimates and the project budget? 1 week 1 day ago #22596

  • Gabriella Dellino, PMP
  • Gabriella Dellino, PMP's Avatar
  • Offline
  • Moderator
  • Moderator
  • Posts: 105
  • Karma: 4
  • Thank you received: 21
Hi Lisa,

I would recommend to refer to Figure 7-8 from the PMBOK Guide to better understand the difference between the two. From there you can see that cost estimates can be derived for each activity, and (by cost aggregation) work package. When you sum up work package cost estimates and contingency reserves (which are also a form of cost estimates), you get the cost baseline. This plus the management reserves provide you with the project budget.

Does that help you clarifying the difference between the two concepts?

Gabriella
Gabriella Dellino, PhD, PMP
PMPrepCast Community Moderator
Last edit: by Gabriella Dellino, PMP.
Moderators: Yolanda MabutasMary Kathrine PaduaCynthia Lim Louis, PMPTracy Shagnea, PMPGabriella Dellino, PMPPatrick Floris PhD PMPJoe PangJohn Paul BugarinAmy MartinezEmily Rivera, PMPMohammad Alharbi, PMP, PMI-ACPLisa Sweeney PMPHarry ElstonMani SelvanDenver MartinEric Wanyutu Kahiga, PMPSarah FucciThiago França, PMP®Felix Kamanga, PMPChan RampersaudKyle Kilbride, PMP

OSP INTERNATIONAL LLC
OSP INTERNATIONAL LLC
Training for Project Management Professional (PMP)®, PMI Agile Certified Practitioner (PMI-ACP)®, and Certified Associate in Project Management (CAPM)®

Login
Get PMP Exam Ready in Just Four Weeks! Join the Live PMP Blended Training Course Starting August 10. Click to learn more...