Hi all,

So one of the practice exams I found has the following question

Jane is leading a small construction project for the first time. The responsible sales manager already had some price discussions with teh customer. Therefore she is unsecure if sh should first estimate costs and then determine budget or determine the budget first and then estimate costs. What should she start with?

A. Determine budget then estimate costs, because the sales manager already had price negotiations with the customer

B. There is no binding order, because on some projects cost estimating and cost budgeting are so tightly linked  that they are viewed as a single process

C. Estimate costs then determine budget, because budget depends on the costs

D. First she should ask the sales manager for the price, because costs are derived from price.

I answered C since two outputs of the estimate costs process are inputs for the determine budget; activity cost estimates, and basis of estimates. According to this exam the correct answer is B because it is a small project and the PMBOK guide states that on small projects these two processes can be merged into one. Would you still not have to at least estimate activity costs before determining budget, if not then what would your budget be based on?

Any clarification would be greatly appriciated!