AACE International Recommended Practice No. 34R-05 BASIS OF ESTIMATE TCM Framework: 7.3 – Cost Estimating and Budgeting Acknowledgments: Todd Pickett, CCC (Author) Peter R. Bredehoeft, Jr. Ted A. Downen Larry R. Dysert, CCC Bruce G. Elliott, CCC John K. Hollmann, PE CCE Copyright 2010 AACE International, Inc. Stephen M. Jacobson CCC Carlton W. Karlik, PE Christopher L. Kinney Donald F. McDonald, Jr. PE CCE PSP Bernard A. Pietlock CCC Richard A. Selg, CCE AACE International Recommended Practices AACE International Recommended Practice No. 34R-05 BASIS OF ESTIMATE TCM Framework: 7.3 – Cost Estimating and Budgeting July 28, 2010 PURPOSE AACE International’s Total Cost Management (TCM) Framework identifies a basis of estimate (BOE) …show more content…
Project Scope Description This section of the estimate basis should be organized to correspond with the project’s work breakdown structure (i.e., plant, building, floor, etc.). A semi-detailed description of the scope of work should be provided for each major segment of the project. Identify any major pieces of process equipment or components. It’s also good practice to indicate the primary trades that will be involved with the project. Be as thorough as necessary, without being overly descriptive, so as to adequately explain the scope of work being estimated. Methodology The BOE should indicate the primary estimating methodology used to prepare the cost estimate. This should include documentation of the use of cost resources, historical data and project benchmarking. Documenting the level of effort or man-hours used in preparation of the estimate may also be helpful. Estimate Classification The AACE International estimate classification should be identified, along with reasons or justification used in the selection of the estimate classification. Design Basis Company standards will typically specify the technical and project information required for the classification of the estimate that is being prepared. In this section, the estimator will identify the types and status
One of the most difficult conditions to live with is a tight budget. You have no choice but to spend only what you have within your means or else you're going to be broke. Although there are many things that you may want to acquire, like beautiful houses, cars, jewelry and clothing, you can't buy them without putting a lot of strain on your budget. Restraining yourself from over spending is the best way to survive during these difficult times. In order to do this you need to do some responsible budget planning. This can be an overwhelming task for many but it's not impossible to do. There are many ways to do it but you will need a lot of patience and resourcefulness in order to come up with a perfect plan. Perfect in a way that it's going to work for you with the least difficulty and greatest results.
(TCO B) You are the project manager for three projects. You are about to estimate costs for these three projects. Given the below information on each project, recommend an appropriate estimation method and justify your answer for each.
Planning is a function that is employed by every organization in projecting the future outcome of the firm. Successful firms achieve their goals through the use of different types of budgets. These budgets include, production budget, sales budget, labor budget and expenses budget. These budgets also show the targets that should be achieved by the firm within the budgeted time plan.
15. What are your thoughts of the importance of understanding the per patient day (PPD)
1.1 This report will provide guidance for the procedure of preparing an estimate for building works. It will include the factors that affect the overall cost of the project explaining them in general as well as explaining them on the example provided.
I am choosing the City of Downey, California and the City of West Covina, California as my two cities for my Budget Analysis Assignment paper. I am going to utilize their budgets from Fiscal Year 2013-2014. As I was viewing their budgets from Fiscal Year 2013-2014, I found out that both cities have their first two pages of the report named, "Adopted Budget."
Overall Theme We will explore fundamental assumptions of cost functions and discuss the relationships between cost behaviour, cost estimation and cost prediction. The concept of cost driver analysis and its application to cost estimation and cost management will also be discussed. We will also describe how to estimate cost behaviour using managerial judgment, engineering methods and other quantitative techniques.
When you write the paper, please don’t use a excel spreadsheet, only use analysis of the data in Microsoft word sheet. I mean explain everything in words. Thanks!
Another element that is essential in the project management plan is the cost management plan. The main focus of the cost management plan is overseeing the cost of the necessary resources for the execution of the project (PMI, 2013). This function is completed within the planning stage of an endeavor to provide a structure to support performance and efficiency throughout the lifecycle of the undertaking (PMI, 2013). For the AAE Project, analogous and parametric estimating was utilized in estimating the potential costs of the endeavor. Appendix T shows the cost breakdown of each activity within the project by separating the salaries, equipment/vendor costs, and vendor contract costs. Since
There were many different financial tools I can make use of that would greatly benefit me in the future, as well as right now in present day. Some financial tools that I can use to make better decision financially are budgets. There are many different types of budgeting systems that can be utilized. Budgeting will help me have a clear goal of what is safe to spend and what needs to be utilized for spending on appropriate items for daily living. With defined goals. It is easier to monitor, track and trend spending. One can better plan for items such as vacations, or for retirement. Using a budget allows one to be conservative with their spending. I can also use a more defined and complete budgeting system such as a comprehensive budget. (Rachel Siegal and Carol Yacht, Personal Finance, Published December 2009). This will allows all facets of my life financially to be monitored and tracked. To show recurring income and expenses deriving from daily life, an operating budget can be utilized. (Accounting Tools, What Are the Types of Budget Models;
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ABSTRACT: This case1 provides an opportunity to study budgets, budget variances, and performance evaluation at several levels. As a purely mechanical problem, the case asks for calculations of various price, efficiency, spending, and volume variances from a set of budgets and actual results. The case is also an interpretive exercise. After the variances have been computed, the next step is to develop plausible conjectures about their likely causes. Finally, it is a case about performance evaluation and responsibility accounting. The company has an incentive plan, based on the budget
Another expense results with budget expectations is capital purchases. Capital purchases are those that cost an organization more than $5,000. Such purchases include radiology equipment, lab equipment, computer systems. Unexpected expenses occur when equipment failure occurs and a need for new or repaired equipment arises or when unexpected volumes of patients require additional capital purchases of equipment to be made. “Working capital management is the role of the manager, in ensuring that there is adequate cash on hand to meet the organization’s needs and minimizing the cost of those resources” (Finkler et al., 2007, p. 360). Variances occur when multiple unexpected costs arise and that reserved cash is expended and needs to assume short-term loans or take away from other departments is necessary. This type of unexpected spending may be categorized as an unfavorable variance. Unfavorable variances are “variances in which more is spent than the budgeted amount” (Finkler et al., 2007, p. 501).
Creating a budget is relatively simple, but sticking to one is a much more arduous task. There is a great deal of self-discipline that goes into solidifying a concrete spending plan.Unfortunately, not all possess this trait, and there are many reasons a budget may not be working the way it was intended to.
| | |justify valid conclusions |advantages and disadvantages of them and show deep understanding |