cost estimates - include indirect costs?
Submitted by crushPMP on Thu, 05/09/2013 - 02:58
While managing a large project, the project manager decided to include indirect costs as a part of his cost estimate. If indirect costs are included in an estimate which of the following is true?
A. Indirect costs should be included at the activity level or higher
B. Indirect costs should be included at the activity level or lower
C. Indirect costs should only be included in earned value measurements and not in cost estimate.
D. Indirect costs should not be included in cost estimates
Forums:
sspawar
Thu, 05/09/2013 - 03:55
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As I understand, option A is
As I understand, option A is correct one.
Indirect cost is taken as % age of direct cost, and while aggregation of estimate costs, of various activities, in process of determining budget/ baseline cost , it is added as an activity cost estimate.
It is considered as a seperate ativity or WPkg or Control Account cost estimate,
rwmv
Thu, 05/09/2013 - 05:48
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Answer-A
I would go with A. If its a large project indirect costs should be added at the activity level
abdsal
Thu, 05/09/2013 - 06:05
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Answer A PMBOK page
Answer A
PMBOK page no.174. first para. last sentence
"Indirect costs, if they are included in the project estimate, can be included at the activity level or at higher levels."
crushPMP
Thu, 05/09/2013 - 14:52
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^ Thanks for the reference,
^ Thanks for the reference, abdsal!