Cost Calculation

Please help with the working:

A project manager is managing a project. The original scope baseline of the project was budgeted at $100,000. Since work on the project started there have been seventeen authorized and approved changes to the project. The changes have a value of $17,000 and the cost of investigating them prior to their approval was $2,500. What is the current budget for the project?
a. $100,000
b. $114,500
c. $117,000
d. $119,500

pmcoe's picture

"A project manager is managing a project." ... LOL ... made my day! ;)

I do not know the answer ...

admin's picture

Since the 17 Changes are approved at cost of $17K, the new project cost becomes $117K , add to that 2.5K for investigation so new cost would be $119.5K

I am not sure if the cost of investigation can always be added to project cost. It depends on your contract with client. , however in this case since changes were approved so cost of investigation is also justified and hence client should pay $119.5

man this one is sketchy.

what if the changes were not approved?  then is budget still adjusted by $2,500

I would sure like to find a PMBOK reference but have not found anything.

IMO, the cost of investigating changes should be included in the original budget since that is an activity that every project needs. 

Also , what do you do when changes are not approved?  lump those into the next approved CR?? not likely

117 seems like the best answer.   or at least equal to the 119500 answer.