BSBPMG514 Manage Project Cost Assessment Task for BSB51415 Diploma of Project Management

This assessment task is for BSB51415 Diploma of Project Management and covers BSBPMG514 Manage Project Cost. It contains two sections. Section 1 requires the development of a project cost plan for a chosen project, while Section 2 requires answering a series of questions related to project execution and evaluation. The assessment includes analyzing the impact of budget cuts, determining necessary changes to maintain project objectives, and drafting a financial report.

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Assessment Task
BSB51415 Diploma of Project Management
BSBPMG514 Manage cost
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Declaration of authenticity
I, the above-named student, confirm that by submitting, or causing the attached
assignment (and any additional attachment associated with it) to be submitted, to
Lonsdale Institute Pty Ltd, I have not plagiarised any other person’s work in this
assignment and except where appropriately acknowledged, this assignment is my own
work, has been expressed in my own words, and has not previously been submitted for
assessment.
I do understand and accept the consequences of academic misconduct according to
Lonsdale’s Policies and Procedures.
Unit Code BSBPMG514
Unit Name Manage Project Cost
Assessment
Code
T1 Due Date See Training Schedule
Student Name Adrian Michael
Warde
Student ID LON0000904

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Assessment Task
BSB51415 Diploma of Project Management
BSBPMG514 Manage cost
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ASSESSMENT TASK
This assessment task contains two sections.
Section 1 - develop a project cost plan for your project of choice.
Section 2 - answer a series of questions, related to your project, explaining project execution and
evaluation.
SECTION 1 - PROJECT COST PLAN
1.Cost Management Approach
Describe how the project cost plan has been developed.
You must:
1. Include the major inputs into the plan
The plan based on the understanding over the project development phase for the Pond’s Bridge
Construction Project includes some major inputs within some major phases concerned with the project.
Some of the major inputs within the project plan have been in the areas of procuring for government
furnished equipment, administering over the project and installation phases.
While deciding over the major inputs, the individual activities were majorly considered. However, the
allocation of resources in these activities were also need to be considered so that each of the phases would
be completed efficiently.
2. Define the negotiated delegated authority for ongoing management of project finance
Western Earth Moving (WEM) is the primary client or the negotiated delegated authority who is primarily
responsible for managing over the areas of project finance. In case of the concerned project based on the
construction of the bridge, WEM is primarily responsible for managing the areas of project finance.
All points MUST be addressed.
2.Resource Requirements
Describe:
1. How resource requirements were identified for the project.
The resources used within the project comprise of human resources as well as material resources. The
human resources that are required for the project are chosen as per the requirements of each activity that
have been planned for the project. In each of the activities defined within the project plan, the human
resources are allocated as per the requirements and determining the person who would be responsible for
performing the designated activities.
2. Resource requirements for individual tasks identified in the work breakdown structure, with inputs from
stakeholders

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BSBPMG514 Manage cost
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The WBS helps in serving major purposes for the completion of the project. Based on defining the
interlocking and independent nature for each activity included within the project, the WBS helps towards
marking each resources required during each activity of the project. The resources include the process of
ensuring that the right and efficient people having the proper qualifications to oversee through the entire
requirements and work for every single activity.
Inputs could be drawn from stakeholders as before the start of the project they would be brought together for
discussing on the project deliverables and help towards defining the required tasks. This would further
ensure that the used language would remain consistent throughout the entire project and hence all tasks are
properly identified.
All points MUST be addressed.
3.Cost Estimation
Describe:
1. How project expenses were estimated.
The different phases within the project were defined initially. Based on the defined activities, the project
expenses were identified by allocating proper costs to each resources. After this, resources were assigned
to each activity and hence in this process the expenses over the project were estimated.
2. How the budget was determined and finalized
In the initial phase, detailed estimates over each of the project costs based on the defined activities were
defined. After the complication, the cost estimates were included within the budgetary plan. Hence, it would
become possible for tracking the project according to the project while ongoing works would be completed.
In the next phases, different estimates were made that were required for finalizing the budget.
3. Include your project contingency approach which considers: project context, risk level and contingency
factors.
In case of the present project under discussion, the construction contact duration (CCD) approach would be
chosen for determination of the project manager, construction manager during the preparation of the
contract-based documents. During setting up of the approach, the risk level should also be determined,
which might affect the final outcomes towards the project. After the determination of the risk levels for the
project, the contingency factors were also defined within the contingency approach.
All points MUST be addressed
4.Cost Monitoring and Control Process
Describe:
1. How project costs will be monitored and what cost-analysis methods will be employed to identify cost variations
The project costs would be monitored based on the determination of the work accomplished against the total
amount of money that has been spent. It would also involve the process of measuring performance data and
viewing over the cost baseline.
In order to identify the variations made within project costs, earned value management (EVM) technique could be
used for measuring the actual performance of the concerned construction project. EVM technique could be used
for the purpose of monitoring over the project costs in terms of schedule and costs. This can thus also be
considered as an input for managing the reviews made over the project performance.
2. How response to cost variances will be managed, approved and implemented (mention cost-analysis methods
and tools in use)

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Project cost variance analysis can be defined as an important technique that permits project teams for comparing
the planned performance with the actual project performance and relevant data. The cost variances made within
the project could be managed by establishing baselines. These baselines are generally schedule and cost that
are defined for the project. After the design of the schedule and cost, the WBS for the project would be approved
by the project manager and company for which the project would be designed.
During determination of costs, the cost-benefit analysis for the project would also be defined and implemented.
This can be discussed as a decision-making tool that would be majorly used for determining the project
feasibility.
3. How financial reports will be developed and provided to key stakeholders.
The financial reports used within the construction project could be developed by measuring each of the costs
defined within the project plan. After the development of the financial reports such as the cost-benefit analysis,
which would determine the ROI and payback period, the key stakeholders would be intimated regarding the
resource usage, cost estimated during each activity and the allocated costs to each resources.
4. How you will delegate authority to ensure ongoing management of project finances
The delegate authority within the project includes the project manager, WEM, construction manager and
computer engineer. During the ongoing process of project financing, the proper authorities would be provided to
project stakeholders regarding the task of managing the project finances in every activity. This would help in
ensuring that the project would be kept on proper tracks and would not exceed the approved project budget.
All points MUST be addressed
5.Project Budget
Attach the budget for your project here or in a separate file with your submission.
Note: As a minimum, your budget should include:
1. Category of expense and description with a specification of units/hours as applicable.

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(Figure 1: Resource names and specification of units/hours)
(Source: Created by author)
2. Reference to your work breakdown structure (you can decide to include your WBS in this document for
reference purposes in appendix).
(Figure 2: The WBS for the project)
(Source: Created by author)
3. Total Cost/Category and % within your total budget.
Cost/Category % of the Total Project Budget
Defining the Conceptual Design 0.36%
Government Furnished Equipment 30.71%
Production 8.34%
Project Administration 41.94%
Delivery of Project 3.22%
Installation 11.9%
Project Closure 3.51%

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BSBPMG514 Manage cost
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4. Relevant comments on possible cost variance and strategy to mitigate cost variance if applicable.
In case of the concerned project based on the construction of the Pond’s bridge, it can be discussed that
there are no instances of cost variance and hence the project have been completed within the proper
budgetary estimations.
5. Total Budget.
The total budget that had been estimated for the project is $3.5 million. However, the project have been
completed within $3,479,170.
SECTION 2 – PROJECT COST EXECUTION AND EVALUATION
Refer to your project cost plan, address each section and cover all points.
Explain what you would do if the following happened at execution phase.
Your budget is cut by 20% half way through the project.
1. Refer to your project plan and discuss the following:
(ALL points MUST be discussed):
a. Analyse the impact of the issue on your project progress. Consider risks, resource
requirements, interdependencies, cost, quality and so forth.
Use the table below to record your analysis.
AREAS ASSESSMENT OF IMPACT ON PROJECT
Cost The cost allocated for the project would be lowered thus impacting through the
outcomes for the project.
Time The time that was estimated for the project completion would need to be
reduced such that exceeding of the project time would not occur.
Quality The quality of the project might degrade as some project activities would need
to be removed for completing the project within proper time.
Risk Risks might get incurred for the project based on loss of beneficial resources,
thus hampering the project objectives and outcomes.
HR The human resources for the project would be lessened and only the important
resources would be used for the project.
Resources The material resources used for the project would be lessened.
Other
(Specify)
The quality of the project would degrade thus affecting the final project
outcomes.

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b. Determine what changes/actions will be necessary in your project to maintain key
project objectives. Explain how they will be implemented.
Record your answer in the table below:
Change/Action Implementation
Defining milestones Milestones within the project activities needs to be
determined, which need to be completed within the
estimated time.
Maintaining open
communication
Open communication would be considered as highly
necessary for ensuring all stakeholders are being
informed about the changes or feedbacks obtained
from customers.
Monitoring project
feedback
Project feedback should be generated after every
individual step that would help towards completing of
the project in a successful manner.
Evaluating risks Risk evaluation is an important step based on
understanding the particular risk areas and mitigating
them with proper responses.
c. Research project financial report templates and draft a report, based on your
estimated budget and the change/variations implemented in your budget to send
to your project sponsor.
Estimated budget – The estimated budget for the project is $3.5 million.
Variation – In the recent aspect, the budget is cut by 20% half way through the project.
Hence, certain variation would be made by cutting down certain activities. The time taken
for the project completion would be reduced and some of the resources would be cut in
order to accommodate within the project budget.
d. Attach your report in a separate file with your submission or include it below.
The previous section includes the report, which suggests the estimated budget and
variation that would be performed based on sending to the project sponsor.
2. You have incorrectly estimated the cost of one of the items in your budget and now its
cost is up 10%. Discuss the following:
a. Identify what item in your budget you have chosen to discuss:
The items within the budget that would be chosen for discussion are:
1. Initial structure build
2. Preparation of site
b. Indicate what cost-analysis method and tools you have used to identify the cost
variation.

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BSBPMG514 Manage cost
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Project cost variance analysis has been used within the project for identification over the
cost variation occurring within the project.
c. Analyse the impact of the cost variation on the project. List below what impact the
cost variation will have on the project:
In case when the costs for the project have risen by 10%, the impact of cost variation
within the project would result in time overruns. There might be also some form of
changes that needs to be made over the scope and specifications.
d. Indicate any actions that are required to maintain financial objectives.
The actions that needs to be taken for maintaining the financial objectives for the project
are:
1. Application of a SMART goal strategy
2. Creation of a realistic project budget
3. Monitoring over each project activity along with their progress
3. Refer to your project, your project cost planning document and reflect on the issues
addressed in the previous questions (assume that the scenarios in question 1, 2
happened during the execution phase of your project and address the following
questions. (ALL points MUST be discussed):
a) In relation to your project and considering your project cost planning documentation,
describe the activities that would be conducted to signify financial completion?
The activities that need to be conducted for signifying the financial completion of the project
are:
1. Closure of project contract
2. Performing a final project risk assessment
3. Final project briefing report
b) Consider that you have now completed your project and you are preparing your
project review report.
Write an evaluation report addressed to your client on the cost plan (include the
lessons learned and recommendations for future projects). (Minimum 100 words).
Based on the evaluation report over the cost plan that has been planned for the project, it
can be discussed that the project costs that have been allocated to each resources are
considered as suitable and fitting within the estimated project budget. The budget allocated
for the project is $3.5 million in which the different activities of the project would need to be
accommodated.
From the consideration of the cost plan for the project, the valuable lessons that are learned
are based on understanding over the allocation of budget to each resources while limiting
the costs according to the allocated budget. It could be recommended that each activity
should be planned accordingly as per the requirements of the project so as to ensure that
the project does not include any unnecessary activities.