Assessment of Project Cost Management in BSB51415 Diploma

This document presents a comprehensive solution to a project cost management assignment within the BSB51415 Diploma of Project Management curriculum. The assignment focuses on key aspects of project cost management, including determining project costs, monitoring and controlling these costs, and completing cost-management processes. The student's response addresses several key questions related to resource requirements, stakeholder guidance, individual task breakdowns with assigned resources, and various cost estimation techniques, such as three-point estimating, parametric estimating, and bottom-up estimating. The assignment also delves into the creation of project budgets, exploring both direct and indirect costs, and outlining the application of budgeting processes, tools, and techniques. Furthermore, the solution includes a discussion on developing a project budget, emphasizing the allocation of resources based on a Work Breakdown Structure (WBS) and the determination of standard rates for project activities. The overall objective is to demonstrate a strong understanding of project cost management principles and their practical application.

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID and Full Legal Name: 41823 – Shavneel Shavneet Kumar
Assessor’s name: Alan
ASSESSMENT INSTRUCTIONS
Overview
Prior to commencing the assessments your assessor will explain each task and the terms and
submission of your task. Please consult your assessor if you are unsure of any questions. It is
important that you understand adhere to the terms and conditions and address each task. The
assessor will support you throughout this process.
Written work
The assessment tasks are used to measure your understanding and underpinning skills and
knowledge of this unit of competency. When answering please ensure you address each criteria
and sub point, demonstrate your research of each of the questions and cover the topic in a logical
and structured manner.
Active participation
It is a condition of enrolment that you actively participate in your studies. Active participation is
completing all tasks on time. If you do not participate you will be required to report to Student
Services Coordinator.
Plagiarism
Plagiarism is taking and using someone else's thoughts, writings or inventions and representing
them as your own. Plagiarism is a serious act and may result in a student’s exclusion from a
course. When you have any doubts about including the work of other authors in your assessment,
please consult your trainer/assessor. The following list outlines some of the activities for which
a student can be accused of plagiarism:
 Presenting any work by another individual as one's own unintentionally
 Handing in assessments markedly similar to or copied from another student
 Presenting the work of another individual or group as their own work
 Handing in assessments without the adequate acknowledgement of sources used, including
assessments taken totally or in part from the Internet
If it is identified that you have plagiarised within your assessment task, then we will organise a
meeting to discuss this with you.
Copyright
You must be careful when copying the work of others. The owner of the material may take legal
action against you if the owner's copyright has been infringed. You are allowed to do a certain
BSBPMG514 Assessment Tool Version 1 18/03/2017
Page 1 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
amount of copying for research or study purposes. Generally, 10% or one chapter of a book is
acceptable, where the participant is studying with, or employed by, an educational institution.
Competency Outcomes
Each activity in this assessment tasks will be marked as either Satisfactory or Not Satisfactory.
If your work is marked as Not Satisfactory you will be provided with feedback from your
assessor and then given time to complete the task. Your assessor will provide you with a timeline
in which you will be required to submit your task. Resubmission timeline will be determined by
the assessor and based on the extent of the re-submission.
When you have completed all tasks in this document you will be granted an overall competency
outcome, which will be either Competent or Not Yet Competent.
If your work is marked as Not Yet Competent you will be asked to resubmit the assessment tasks
as indicated by your assessor. You will not be able to gain competency if any of your tasks are
not fully completed.
Assessment Appeals Process
If you are dissatisfied with the outcome of one of the assessment tasks or the final outcome of
the assessment task because you feel that the result is unfair or incorrect, you may request to
have the task/s or overall assessment task reviewed. If you are still dissatisfied with the
outcome, you may lodge a formal assessment appeal. Refer to SBTA’s Complaints/Appeals
Policy and Procedure.
Application of the unit
This unit describes the skills and knowledge required to identify, analyse and refine project costs
to produce a budget, and to use this budget as the principal mechanism to control project cost. It
applies to individuals responsible for managing and leading a project in an organisation,
business, or as a consultant.
Assessment matrix
ELEMENTS PERFORMANCE
CRITERIA
ASSESSMENT
TASKS
1. Determine project costs 1.1, 1.2, 1.3, 1.4 Task 1, 2
2. Monitor and control project costs 2.1, 2.2, 2.3, 2.4 Task 1, 2
3. Complete cost-management processes 3.1, 3.2, 3.3 Task 1, 2
Performance
Evidence work closely with others to determine resources against
budgetary frameworks
prepare a budget and cost-management plan for a project
Task 2
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 2 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
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.
Task 1
Foundation
Skills
Reading, Writing, Oral Communication, Numeracy, Interact
with others and Get the work done
All Activities
Dimensions
of
Competency
Task skills, task management skills, communication
management skills, analysis & problem solving skills
All Activities
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 3 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
Assessment task 1: Knowledge and Discussion Questions
Information to students:
This assessment task will enable you to demonstrate your knowledge of:
 Determining project cost
 Monitoring and controlling project cost
 Completing cost-management processes
To complete this assessment task you are able to research your answers using books provided or
the Internet but your answers must be in your own words.
At the end of this task your assessor will give you feedback. Your assessor will also check all
your answers; if your answers have been copied from other students from your current or other
classes you will be required to resubmit this task again.
Please clarify any questions which you do not understand fully with your trainer and assessor
prior to you completing each question to ensure you are answering your questions correctly.
Please note that this task is to be typed up when you are submitting the task for marking unless
specified otherwise.
Questions:
Read all discussion points below in class with your colleagues and your trainer and assessor, and
provide answers to each question below.
Answer guide: This assessment task is to be typed with 1 to 2 paragraphs per question or as
directed by individual questions
Note: you are able to use an example of a project from an organisation which you understand
well, a project for which you have previously completed an assessment for or a project that your
assessor will give you to complete this assessment task.
1.1. It is important to understand different tasks and relevant activities within a project. The
following questions will enable you to discuss resource requirements and demonstrate your
understanding and breakdown structure of a project, it’s different individual tasks, what
input can be gained from relevant stakeholders and guidance from others that can be
received.
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 4 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
Read each point below, discuss and answer in your own words.
a. Give examples of resource requirements related to an organisation you understand
well or an organisation your assessor has provided you to research.
Human resources needed for the project delivery includes Project Manager,
Resource Manager, Business analyst, Supervisor, and staffs and employees, IT
technician, Electricians, vendor of cloud services. The technical resources needed
for the deployment will be PCs, Routers, internet connection with high bandwidth,
cables and online on-demand services such as application and software
b. Discuss and list below individuals who may be able to provide you guidance when
determining resource requirements of a project.
Project Manager, Resource Manager, Business analyst, Supervisor, and staffs and
employees, IT technician, Electricians, and vendor of cloud services
c. Discuss, list and provide examples of individual tasks and resources assigned to each
task within a project so that costs can be determined. In your answer list each task and
resources needed to successfully complete each task. (Guide: list minimum of 4 tasks
or more)
Task (breakdown steps of the task) Resources required to complete this
task successfully
1. Phase 1: project Initiation
1.1 Identification of the problem
1.2 proposing solution
1.3 analysing the feasibility of the cloud
services
2. Phase 2: project Planning
2.1 schedule estimation
2.2 budget estimation
2.3 vendor identification
2.4 resources identification
3. Phase 3: project execution
3.1 assigning roles and responsibilities
3.2 assigning resources
3.3 Deploying IT infrastructure
3.4 Establishing network
3.5 Hiring third party
3.6 Utilizing on-demand services
Business analyst, Project manager, IT
team
Project manager, resource manager and
executives
Project manager, supervisor, IT
Technician, hardware, software, human
labor
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 5 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
4. phase 4: monitoring and controlling
4.1 auditing
4.2 Testing
4.3 Identification of bugs and glitches
4.4 Implementing changes
5. Project Closure
5.1 Documentation
5.2 Project signoff
5.3 lessons learned
IT technician, Project manager,
Supervisor, testing tools
Project manager, other internal
stakeholders
1.2. It is important to estimate project costs to enable project budget to be prepared within
agreed tolerances.
a. Discuss the following points in the table below and provide answers:
Discussion points Comments and answers
What can a good
estimate clearly
define?
It will be clearly defining the accomplishment of the project,
assumptions made, validity of the estimation, the cost that will
be expend in the project
What is considered
when estimating
project costs?
Indirect cost, direct cost, management reserves, contingency
reserves
Before starting the
estimation of
project costs, what
you should ensure
that you have
done?
Avoiding project cost overruns, feasibility of the finance
estimated, labour, materials, equipment, services, software,
hardware, facilities, contingency costs
Give examples of
different estimation
techniques and
outline methods
and tools for
costing and cost
analysis
Three Point Estimating, Parametric Estimating, Bottom up
Estimating, Analogous Estimating
What cost
estimating rules
should be
considered?
Rules of CERs (cost estimating relationships) thumb,
analogies, parametric models
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 6 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
b. Review the example project from question 1.1c) and outline the possible project costs
using one estimation technique you listed above.
1. Phase 1: project Initiation
1.1 Identification of the problem
1.2 proposing solution
1.3 analysing the feasibility of the cloud
services
2. Phase 2: project Planning
2.1 schedule estimation
2.2 budget estimation
2.3 vendor identification
2.4 resources identification
3. Phase 3: project execution
3.1 assigning roles and responsibilities
3.2 assigning resources
3.3 Deploying IT infrastructure
3.4 Establishing network
3.5 Hiring third party
3.6 Utilizing on-demand services
4. phase 4: monitoring and controlling
4.1 auditing
4.2 Testing
4.3 Identification of bugs and glitches
4.4 Implementing changes
5. Project Closure
5.1 Documentation
5.2 Project signoff
5.3 lessons learned
5,500
2000
2000
1500
4700
1000
1200
1500
1000
25000
5000
2500
4000
6000
2500
5000
6000
2000
1500
1200
1300
3500
1000
1200
1300
1.3. Review points a and b and complete individually:
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 7 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
a. Complete the following table.
Discussion points Comments and answers
What is a project
budget?
Estimation of total budget that is required for the successful
delivery of the project
Give examples of
budgeting
processes, tools
and techniques
Top-down estimation, three cost estimation, bottoms up
estimation, parametric estimation, MS project
For your example
(question:1.1c),
outline the direct
and indirect costs
Direct cost: Hardware will cost $ 10,000, and software will
cost $ 12, 000, other material and resource $ 5000.
Indirect Cost: Supervisor will charge $ 50 per hour, manager
will charge $ 100 per hour, IT technician will charge $ 20 per
hour
Outline how
budgeting
processes, tools
and techniques
have been applied
to your project (q:
1.1c)
The above mentioned values are collected using the tools and
techniques mentioned in this paper.
b. In small groups discuss and explain how you would develop a budget for a project.
The resource will be identified as per the WBS prepared and all the resources will
be assigned to the activities. Thereafter, the standard rate will be determined and
allocated similarly to the project activities. Calculation will be done as per the
estimated time standard rate. Multiplying standard rate with the overall time for the
Project Life Cycle as per the allocated activity in the overall project execution.
c. Use the space below to draft and develop a brief project budget for the project you
have listed in question 1.1c.
1. Phase 1: project Initiation
1.1 Identification of the problem
1.2 proposing solution
1.3 analysing the feasibility of the cloud
services
2. Phase 2: project Planning
2.1 schedule estimation
5,500
2000
2000
1500
4700
1000
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 8 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
2.2 budget estimation
2.3 vendor identification
2.4 resources identification
3. Phase 3: project execution
3.1 assigning roles and responsibilities
3.2 assigning resources
3.3 Deploying IT infrastructure
3.4 Establishing network
3.5 Hiring third party
3.6 Utilizing on-demand services
4. phase 4: monitoring and controlling
4.1 auditing
4.2 Testing
4.3 Identification of bugs and glitches
4.4 Implementing changes
5. Project Closure
5.1 Documentation
5.2 Project signoff
5.3 lessons learned
1200
1500
1000
25000
5000
2500
4000
6000
2500
5000
6000
2000
1500
1200
1300
3500
1000
1200
1300
1.4. Project supervisors and managers must be able to develop suitable and relevant cost-
management plans, within delegated authority, to ensure that an ongoing management of
project finances is clear and understood by relevant stakeholders.
a. Discuss and address the following points and complete the table below.
Discussion points Comments and answers
What is a cost
management plan?
 It is a process that is helpful in controlling and planning
the overall budget of the project life cycle, which allows
the manager to predict the expenditures those are
necessary for the deployment of the overall project
What steps are
involved within the
development of a
cost management
plan?
 Step 1: Resource Planning
 Step 2: Cost estimation
 Step 3: Cost budgeting
 Step 4: Cost Control
If your cost
management plan is
It means that the sharing of authority and delegation has been
crucial factor for the success of the project
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 9 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
developed within
delegated authority,
what does this
mean?
b. For your example project from question 1.1c, develop a brief cost management plan.
Resources required for the development of the project:
Project manager, supervisor, IT Technician, hardware, software, human labor
Estimated cost for the resources can be listed as follows:
Direct cost: Hardware will cost $ 10,000, and software will cost $ 12, 000, other
material and resource $ 5000.
Indirect Cost: Supervisor will charge $ 50 per hour, manager will charge $ 100 per
hour, IT technician will charge $ 20 per hour
Cost budgeting:
1. Phase 1: project
Initiation
5500
2. Phase 2: project
Planning
4700
3. Phase 3: project
execution
25000
4. phase 4: monitoring
and controlling
6000
5. Project Closure 3500
Cost Control
1. Phase 1: project
Initiation
5500 – 5%
2. Phase 2: project
Planning
4700 – 2%
3. Phase 3: project
execution
25000 – 10 %
4. phase 4: monitoring
and controlling
6000 – 4%
5. Project Closure 3500 – 3 %
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 10 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
1.5. This question will provide you with an opportunity to demonstrate your understanding of
implementing agreed financial-management processes and procedures to monitor actual
expenditure against a project budget. Read each question below and answer.
a. Discuss and explain what does monitoring your actual expenditure against your
budget allow you to do?
It will be helpful in restricting the overrun of the costs of the project and monitoring
the budget expended on the project and how much it could have been saved if not
any of the measures have been taken
b. What are financial management processes and procedures? Give examples. (Guide:
minimum of 4 examples)
c. Before the monitoring process, what needs to be determined?
The reason behind monitoring must be determined prior to the monitoring, what is
about to be monitored, should also be determined including the key features of the
effective monitoring
d. What is a critical path schedule and how can it be used to monitor expenditure?
Critical path schedule is a technique of bring the behind – scheduled activity or task
of the project on the track that can be useful in determining the crucial activities of
the project and keeping the project in schedule. Yes, it can be used to monitor the
expenditure through utilizing the eared value of the overall project budget.
e. What is a KPI?
Key performance indicator can be defined as the measurable value that allows the
managers to demonstrate how project can be managed for achieving the objectives of
the business.
f. Give examples of KPIs that may be used in the assessment of project expenditures.
Total Expenses, SG&A (selling general and administrative expenses, sales expenses,
marketing expenses, inventory turnover, cost per unit, cost per hire and many other
KPIs can be used to in the assessment of the project indicators.
g. Explain how you would monitor the actual expenditure within your example project
from question 1.1c. (Guide: 3 paragraphs)
Average annual expenses on the single customer, cost per hire, and Sales expenses
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 11 of 27

Assessment Tool
Qualification BSB51415 Diploma of Project Management
Cluster number and name: PMD 2.1 Manager project cost
Units of competency: BSBPMG512 Manage project cost
Student’s ID:
Assessor’s name:
are the effective approach for the management of the above mentioned project.
1.6. Individual team members of a project group should be able to select and use cost-analysis
methods and tools to identify cost variations and evaluate alternative actions.
a. In small groups discuss the following points in the table and in groups complete this
table.
Discussion points Comments and answers
What is schedule
variance?
It can be described as the indicator that is helpful in
determining whether the schedule of the project is behind
schedule or ahead of the expected schedule that has been
utilized within the Earned Vale Management.
What is schedule
performance index?
It can be described as the ratio of the EV earned value to the
Planned value that is another helpful indicator of determining
the activities behind the schedule.
What is cost
variance?
It can be described as the difference between the actual
amount of the cost and the budget that has been planned.
What is cost
performance index?
It is an indicator that specifies whether the project has been
remaining on the budget or not or how effectively and
efficiently the project is going on.
b. For your example project (listed in question 1.1c), outline the cost-analysis methods
and tools that you would use to identify any cost variations. (Guide: 3 paragraphs)
Following are the tools and techniques those are capable of identifying the cost
variances occurring in the selected project:
Expert judgement: it can be described as the utilization of the knowledge and
experience of the experts in manner to assure the estimation has been driven in an
effective and efficient manner. The unique factors of the project can be considered
in this technique despite of being biased, it is helpful in the cost variance analysis
Analogous estimating: It can be described as a technique in which historical data
from the same project has been used as a reference for the estimation of the cost. the
identified estimates could be utilized in the prior phases of the project however; it
has been considered as less accurate approach than others.
Parametric estimating: It can be defined as a technique of utilizing the statistical
modelling in manner to develop the cost estimation that can be accomplished
through utilizing the historical data.
BSBPMG514 Assessment Tool Version 1 Issued 18/03/2017
Page 12 of 27