Diploma of Project Management: Project Cost Management Assessment

This document outlines a comprehensive project cost management assignment designed to assess a student's understanding of key project cost management principles and practices. The assessment is based on the BSBPMG514 unit of competency, which is part of the Diploma of Project Management. The assignment is divided into two main tasks: written responses and a portfolio of evidence. The written responses section evaluates the student's knowledge of project cost management concepts, including resource requirements, cost estimation, budget development, and cost management planning. The portfolio of evidence requires the student to demonstrate the application of cost management skills through a project, including creating a budget, monitoring costs, and preparing financial reports. The assessment criteria emphasize the importance of linking theoretical aspects of project cost management with practical experience and application. The student is required to demonstrate their ability to work with stakeholders, manage project finances, implement cost-management processes, and analyze cost variations. The assignment also assesses the student's ability to provide accurate and timely financial reports and review project outcomes.

Details of Assessment
Term and Year 3, 2018 Time allowed 3 weeks
Assessment No 1 Assessment Weighting 100%
Assessment Type Written Responses, Case Studies and Portfolio of Evidence
Due Date Week 4 Room
Details of Subject
Qualification BSB51415 Diploma of Project Management
Subject Name Project Cost Management
Details of Unit(s) of competency
Unit Code &Name BSBPMG514 Manage Project Cost
Details of Student
Student Name
College Student ID
Student Declaration: I declare that the
work submitted is my own, and has not been
copied or plagiarised from any person or
source.
Signature: ___________________________
Date: _______/________/_______________
Details of Assessor
Assessor’s Name
Assessment Outcome
Results Competent Not Yet Competent Marks / 100
FEEDBACK TO STUDENT
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
Student Declaration: I declare that I have been
assessed in this unit, and I have been advised of my
result. I am also aware of my right to appeal and the
reassessment procedure.
Signature: ____________________________
Date: ____/_____/_____
Assessor Declaration: I declare that I have
conducted a fair, valid, reliable and flexible
assessment with this student, and I have provided
appropriate feedback
Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/_____/_____
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Purpose of the Assessment
The purpose of this assessment is to assess the
student in the following learning outcomes:
Competent
(C)
Not yet Competent
(NYC)
1.1 Determine resource requirements for individual tasks
identified in the work breakdown structure, with input
from stakeholders and guidance from others
1.2 Estimate project costs to enable project budget to be
prepared within agreed tolerances
1.3 Develop a project budget
1.4 Develop a cost-management plan, within delegated
authority, to ensure clarity of understanding and ongoing
management of project finances
2.1 Implement agreed financial-management processes
and procedures to monitor actual expenditure against
budget
2.2 Select and use cost-analysis methods and tools to
identify cost variations and evaluate alternative actions
2.3 Implement and monitor agreed actions to maintain
financial objectives
2.4 Provide accurate and timely financial reports
3.1 Conduct appropriate activities to signify financial
completion
3.2 Review project outcomes using available records to
determine effectiveness of project cost management
3.3 Review cost-management issues and document
improvements
Assessment/evidence gathering conditions
Each assessment component is recorded as either Competent (C) or Not Yet Competent (NYC). A student
can only achieve competence when all assessment components listed under “Purpose of the assessment”
section are recorded as competent. Your trainer will give you feedback after the completion of each
assessment. A student who is assessed as NYC (Not Yet Competent) is eligible for re-assessment.
Resources required for this Assessment
Weekly eLearning notes relevant to the tasks/questions should be read prior to undertaking the assessment.
Instructions for Students
Please read the following instructions carefully
 This assessment must be completed In class At home
 The assessment is to be completed according to the instructions given by your assessor.
 Feedback on each task will be provided to enable you to determine how your work could be improved.
You will be provided with feedback on your work within two weeks of the assessment due date. All other
feedback will be provided by the end of the term.
 Should you not answer the questions correctly, you will be given feedback on the results and your gaps
in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be
deemed competent for this unit of competency.
 If you are not sure about any aspects of this assessment, please ask for clarification from your
assessor.
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 Please refer to the College re-assessment for more information (Student Handbook).
ASSESSMENT TASKS
There are two tasks to complete for this unit of competence:
Task 1 – Written responses
This activity has been designed to assess your knowledge and understanding of managing project cost
within projects.
This task consists of questionnaires which reflect the knowledge of project management (PMBOK). The
responses should include the following:
 Must be relevant to your project as stated in BSBPMG511 Manage Project Scope, unless otherwise
stated. Responses should link to the theoretical aspects of project cost management followed by
relevant experience / exposure of your nominated project you have recently or are currently working
on to progress both your studies and your projects simultaneously. Your response to the
questionnaires must relate to the same project topic chosen for BSBPMG511 Manage Project
Scope subject unit.
 However, if you have started with this subject topic as an initial attempt of this course, you must
negotiate and discuss with your Assessor to consider a project that you recently or are currently
working on or a project that you have worked in the past.
 If workplace project exposure does not apply to you, you must negotiate with your assessor to use a
scenario/case study examples that you will find on e-learning. However, case study examples are a
suitable substitute where workplace examples cannot be provided. Case studies are available on e-
learning. Theory answers without reference to your experience will not be assessed as satisfactory
 Demonstrate that you can or have applied what you have learnt to your project, regardless of
whether you have undertaken all the performance requirements in your workplace
Task 2 – Portfolio of Evidence
The portfolio of evidence comprises the assessment of the application of your project cost knowledge. You
will need to demonstrate your costmanagement skills applied to a project which is based on the project you
have chosen for BSBPMG511 Manage Project Scope subject unit. It should state relevant experience /
exposure of your nominated project you recently or are currently working on to progress both your studies
and your projects simultaneously.
If you have started with this subject topic as an initial attempt of completing this course, you must negotiate
and discuss with your Assessor to consider a project that you recently or are currently working on or a
project that you have worked in the past.
If workplace project exposure does not apply to you, you must negotiate with your assessor to use a
scenario/case study examples that you will find on e-learning. However, case study examples are a suitable
substitute where workplace examples cannot be provided. Case studies are available on e-learning.
To such a degree you must negotiate with your assessor to use a scenario/case study examples that you
will find on e-learning.
Your nominated project must be agreed between you and your Assessor so that its methodology, tools and
techniques accommodate to the performance requirements of each Unit of Competency prior to start of work
on the unit.
Your project must comprise:
 a comprehensive, detailed and integrated project management plan
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 a formal communications plan
 a devoted and project-based budget
 formal and planned involvement with a wide range of stakeholders
 a documented risk, issues and change-management methodology
 a quality plan with assurance and control processes
 a project team-based environment.
Evidence of the following is important:
 demonstration of cost management for several complex projects
 knowledge of cost management plans, tools, issues and likely challenges
To achieve competency, you are required to demonstrate knowledge, skills and experience to:
Performance Evidence
 work closely with others to determine resources against budgetary frameworks
 prepare a budget and cost-management plan for a project
 monitor costs across a project's life cycle including solving cost variations and analysing possible
alternatives
 record expenditure, create accurate financial reports and review cost-management processes.
Knowledge Evidence
 explain appropriate budgeting processes, tools and techniques
 describe methods and tools for costing and cost analysis
 explain strategies for managing costs and their application in different situations
 outline processes for reviewing costs against outcomes
 summarise key organisational policies and procedures applicable to this role.
STRUCTURE AND MARKING CRITERIA FOR ASSESSMENT TASKS:
I. TASK 1 – Written Responses(Total 15 marks for TASK 1)
Q1: Qualifying Cost and benefits(5 marks)
Q2: Cost of non-conformance on quality requirements (5 marks)
Q3 Tools and techniques use to manage quality (5 marks)
II. TASK 2 – Portfolio of Evidence(Total 85 marks for TASK 2)
A. Estimating Project Costs (10 marks)
B. Development of Cost Management Plan (10 marks)
C. Monitor and Control Project Costs (15 marks Total)
1. Two Cost Analysis Methodsfor cost variations (5 marks)
2. Budget Performance Report (5 marks)
3. Evidence and reason of re-planning to revive original budget (5 marks)
D. Cost Management Processes ( 50 marks Total)
Q1. Financial completion activity (5 marks)
Q2. Performance review of cost management processes and procedures (5 marks)
Q3. Project performance related to cost (5 marks)
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Q4. Management of variances (5 marks)
Q5. Changes of cost implications and recommendations (10 marks)
Q6. Project risk issues associated to project budget (5 marks)
Q7. Management of project cost risk issues (5 marks)
Q8. Evaluation of effective cost and budget controls (5 marks)
Q9. Project Sponsor’s satisfaction level (5 marks)
TABLE OF CONTENT
Content Pages Marks Marks
Achieved
TASK 1 – Written Responses (Total 15 marks for TASK 1)
Q1: Qualifying Cost and benefits 5
Q2: Cost of non-conformance on quality requirements 5
Q3: Tools and techniques use to manage quality 5
TASK 2 – Portfolio of Evidence (Total 85 marks for TASK 2)
A. Estimating Project Costs (10 marks)
Estimating Project Costs 10
B. Development of Cost Management Plan (10 marks)
Development of Cost Management Plan 10
C. Monitor and Control Project Costs (15 marks Total)
1. Two Cost Analysis Methods for cost variations 5
2. Budget Performance Report 5
3. Evidence and reason of re-planning to revive original
budget 5
D. Cost Management Processes (50 marks Total)
Q1. Financial completion activity 5
Q2. Performance review of cost management processes and
procedures 5
Q3. Project performance related to cost 5
Q4. Management of variances 5
Q5. Changes of cost implications and recommendations 10
Q6. Project risk issues associated to project budget 5
Q7. Management of project cost risk issues 5
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Q8. Evaluation of effective cost and budget controls 5
Q9. Project Sponsor’s satisfaction level 5
Total 100
The learner is required to update and adjust the page numbers and topics based on the amount of their content
and the responses made to each task.
Task 1 – Written Responses
(BSBPMG514 – 1.1,1.2,1.3,1.4, 2.1,2.2,2.3,2.4,3.1,3.2,3.2,3.3)
Answer the following questions in the appropriate spaces below:
All responses must:
This activity has been designed to assess your knowledge and understanding of managing project
cost within projects.
This task consists of questionnaires which reflect the knowledge of project management (PMBOK).
The responses should include the following:
 Must be relevant to your project as stated in BSBPMG511 Manage Project Scope, unless
otherwise stated. Responses should link to the theoretical aspects of project quality
management followed by relevant experience / exposure of your nominated project you
recently or are currently working on to progress both your studies and your projects
simultaneously. Your response to the questionnaires must relate to the same project topic
chosen for BSBPMG511 Manage Project Scope subject unit.
 However, if you have started with this subject topic as an initial attempt of this course, you
must negotiate and discuss with your Assessor to consider a project that you recently or are
currently working on or a project that you have worked in the past.
 If workplace project exposure does not apply to you, you must negotiate with your assessor to
use a scenario/case study examples that you will find on e-learning. However, case study
examples are a suitable substitute where workplace examples cannot be provided. Case
studies are available on e-learning. Theory answers without reference to your experience will
not be assessed as satisfactory
 Demonstrate that you can or have applied what you have learnt to your project, regardless of
whether you have undertaken all the performance requirements in your workplace
15 Marks
Question 1: Which is usually the easier to quantify for a project – the costs or the benefits?
Describe why.(BSBPMG514 – 1.1, 1.3, 1,4, 2.1,2.2,2.3,2.4,3.1,3.2,3.3) 5 Marks
Cost is considered as the easier components in quantifying the project worth due to the
nature of the elements covered in a project.1 Benefits of a project can be categorized into
financial and non-financial aspects but the cost is a financial aspect which can be
determined easily to develop the budget. The worth of the project can be identified by an
individual using the cost-benefit analysis in which the capability of a particular project is
1 Kerzner, H. and Kerzner, H. R.,. Project management: a systems approach to planning,
scheduling, and controlling. John Wiley & Sons., 2017
Project Cost Management Assessment Task, v1 Page 7 of 16Updated 23 March 2018

tested by ascertaining all the costs and the benefits related to the project2.
Question 2: Define how a project budget is produced, communicated, agreed to and authorised by
project stakeholders in your workplace. (BSBPMG514-1.1, 1.2, 1.3,2.1,2.3, 3.1,3.2, 3.3)5 Marks
A project manager will follow a systematic procedure which consists of various stages
which helps in developing the project budget. The first and the foremost step covered in the
process are to identify the requirement of the project by enclosing all the project activities,
and then need of preparing the budget, requirements of the stakeholders. In the next stage,
the planned budget is offered to the project sponsor and all the stakeholders to seek its
consents for finalizing the budget using email mode of communication whose reply is given
to a manager of a project to authorize the planned budget.
Question 3: Describe the tools and techniques you have used to monitor and control project costs
across the life cycle of projects that you have nominated or within your workplace. Include cost
analysis methods and tools used to identify cost variances.(BSBPMG514-2.1,2.2,2.3,2.4)
5 Marks
Absorption and variable costing are the two methods used in analysing the costs incurred
in a particular project. Absorption costing will utilize both the fixed costs as well as the
variable cost covered in a project3. On another hand, variable costs will consist of variable
costs which will get change according to the changes in the volume of the production.
Standard costing method is used to evaluate the variances incurred in a project in which
standard results of the budget are compared with the actual figures to trace the positive or
the negative variances4.
2 Schofield, J. A., Cost-benefit analysis in urban & regional planning (Vol. 20). Routledge.,
2018.
3 Fuller, M. A., Valacich, J. S., George, J. F. and Schneider, C., Information Systems Project
Management: A Process and Team Approach, Edition 1.1. Prospect Press., 2017.
4 Rezakazemi, M., Heydari, I. and Zhang, Z., Hybrid systems: combining membrane and
absorption technologies leads to more efficient acid gases (CO2 and H2S) removal from
natural gas. Journal of CO2 Utilization. 18. 2017, pp.362-369.
Project Cost Management Assessment Task, v1 Page 8 of 16Updated 23 March 2018

Communication and reporting processes- In this project, the scalar chain is introduced in
which project subordinated will vertically communicate with the project owner to maintain a
clear reporting channel.
Task 2 – Portfolio of Evidence
(BSBPMG514 – 2.1,2.2,2.3, 3.1,3.2,3.3)
You must use the same project for all units in this course and must be relevant to your project as
stated in BSBPMG511 Manage Project Scope, unless your nominated project changes during the
course or cannot adapt to the performance requirements of any of the units of competency. If either
or both events occur during your course, you must contact your Assessor to find out what you need to
do to continue to satisfy the course performance requirements and achieve competency.
The project must be in an organisation, business or you are operating as a consultant.
Your nominated project must have:
 a comprehensive, detailed and integrated project management plan
 a formal communications plan
 a dedicated and project-based budget
 formal and planned engagement with a wide range of stakeholders
 a documented risk, issues and change-management methodology
 a quality plan with assurance and control processes
 a project team-based environment.
You will need to complete the relevant templates from each knowledge area which are provided, you
may use templates from this assessment or from your workplace that provide evidence of your
competency.
A. Estimating Project Costs 10 Marks
(BSBPMG514 1.1, 1.2)
Develop a project spreadsheet of project costs estimates based on your project scope/work
breakdown structure, and use the suggested template provided below or any appropriate workplace
templateor any software (MS Excel) of your choice. You will need to follow these steps:
 List all project activities
 Assign all required project resources to the appropriate activities including both variable and fixed
cost resources.
 Summarise costs by activity
 Summarise costs by resource
 Consider miscellaneous costs such as contingencies, administrative costs, communications etc
 Consult cost estimates from other similar projects
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 Complete the cost estimate
 Present you preliminary estimate to an expert colleague as a reality check
Explain how you would deliver this information to stakeholders. In particular, how you would get the
approval for your budget. You may use the template given below or create your own.
Activity Resources required
WBS
Code
Description Duration Resource
name & rate
Resource name &
rate
Other
costs
Total costs
by activity
B. Development of Cost Management Plan 10 Marks
(BSBPMG514 1.3, 1.4)
Develop a cost management plan to be used throughout the life cycle of your nominated project. This
plan must include suitable financial management roles, processes and procedures to monitor actual
expenditure against budget and control costs.
For the cost management plan for your project, you may include:
 Units of measure
 Level of precision
 Level of accuracy
 Organisation cost management procedures to be followed including roles and responsibilities
 Control thresholds
 Rules of performance measurement
 Reporting formats
 Process descriptions (these could include any two of the following and must be step by step
including who is involved and when as well as a description of how this will help you monitor
actual vs. budgeted expenditure).
o Approval processes
o Financial authorisations and delegated authority
o Communication and reporting processes
o Invoice procedures
 Organisational chart of account links (if applicable)
Cost Management plan
<
 Units of measure- Cost per unit, cost of staff per hour
 Level of precision- Value is rounded off to a dollar
 Level of accuracy- +/- 5%
 Organisation cost management procedures
2. Work breakdown structure is prepared as part of the cost management plant which specifically
includes resources attached for all the activities to accomplish all the singular tasks with a high
Project Cost Management Assessment Task, v1 Page 10 of 16Updated 23 March 2018

precision5. The roles and the responsibilities of all the personnel working on a particular project. It
includes various roles and the responsibilities given as below:6
 Assigning costs to all the activities
 Identifying cost requirements
 Budget preparation
 Project scheduling
 checking the validity of the project costs
Control thresholds
 Cost should not exceed the standard budget
 completing the budget within the given timeline
 Negative action should be reported to the project owner and sponsor on a high
priority basis
Rules of performance measurement- ABC costing method is used to ensure the high
quality of the project by assessing all the costs covered in a project.
 Reporting formats- The cost management plan is generated through MS project
on a monthly basis by recording all the activities in a stipulated time.
 Process descriptions
o Financial authorizations and delegated authority- Authorized person such as manager and
the accountants are held responsible for checking all the transactions incurred in a project by
setting a prescribed limit of $2000 as when this limit will cross by any transactions then the
authorized party will sign on the vouchers.
o Communication and reporting processes- In this project, scalar chain is introduced in
which project subordinated will vertically communicate with the project owner to maintain a
clear reporting channel.
>
C. Monitor and Control Project Costs: 15 Marks
(BSBPMG514 2.1, 2.2, 2.3, 2.4,)
C1. Use two cost-analysis methods and tools to demonstrate the cost variations that occurred
in your project. 5 Marks
5 Arias, C., Antonio, J., López Carvajal, L., Tamayo, M. and Vélez, I. D., Cost-effectiveness
analysis of thermotherapy versus pentavalent antimonials for the treatment of cutaneous
leishmaniasis, 2018.
6 leishmaniasis.
Thornton, H., The breakdown of capitalism: A History of the idea in western Marxism, 1883-
1983. Routledge, 2017.
Project Cost Management Assessment Task, v1 Page 11 of 16Updated 23 March 2018

< Absorption costing and variable cost are the two cost analysis use by an entity in order to
consider all the costs covered by a project. And standard costing is considered for
determining the overall performance of a project by assessing it in the terms of the cost
involved in this project7. In the current cost budget there is a positive variance and few
negative variances incurred in this project which should be eliminated within the given time.>
C2. Provide a detailed budget performance report showing variances against baseline budget.
5 Marks
< Standard costing method is used to assess the performance of a project under which the
actual results of the project is compared with the standard results to get to know about the
quality of all the activities in this project8. The current cost budget is showing the higher
performance of an entity as the actual costs are less than the standard costs which result in
the surplus for a project manager.>
C3. Present evidence of replanning to bring project back to original budget including the
reason replanning is needed and the options available to bring the project back on budget as
well as the option selected. 5
Marks
< In this plan, two of the component is showing the negative results such as searching for the
alternatives and identifying all the risks incurred in this project9. Due to all these activities, the
budget should be replanned to predict the cost of searching alternatives for this project by
using various means such as using the internet’s which is considered as an integral function
in managing all the activities enclosed in this project.>
D. Complete Cost Management Processes 50 Marks
(BSBPMG5142.1, 2.2, 2.3, 2.4, 3.1, 3.2, 3.3,)
Answer the following questions to demonstrate your understanding of reviewing project costs and
budget.
Question 1:Provide in detail a financial completion activity you would need to undertake at the end of
the project. (BSBPMG514-3.1)5 Marks
In the financial completion activity, a project manager will include all the sources of revenues earned
in this project and the cash flow generated by a particular project as these are the essential sources in
repaying the cost incurred in completing the project10. This will also include the methodology used to
7 Christian, D.,. Building Cost Management: Case Study Using Costing Methods. IJAME,
2018
8 Cardona‐Arias, J. A., López‐Carvajal, L., Tamayo Plata, M. P. and Vélez, I. D., Cost‐
effectiveness analysis of thermotherapy versus pentavalent antimonials for the treatment of
cutaneous leishmaniasis. Journal of Evidence
‐Based Medicine. 10(2). 2017, pp.81-90.
9 Qing, S., Peng, W., Zheng-fei, F. and Xin-yu, L., Essentials and Control of Budget Control
of Construction Cost. Building Technology Development. 20. 2017, p.058.
Project Cost Management Assessment Task, v1 Page 12 of 16Updated 23 March 2018