Student Name:

Student ID:

Unit Code:

BSBPMG533

Unit Title:

Manage project cost

Trainer/Assessor Name:

Trainers Assessment Checklist:

Advised participant of date and time ofassessment

Explained purpose and consequence ofassessment

Explained rights and appeals against assessment process and outcomes

Explained appropriate evidence to complete assessment

Participants special needs relating to the assessment process have been discussed and agreed to

Tasks

Description

Attempt No.

Result

Assessment task 1

Knowledge questions

1

2

Satisfactory Not satisfactory Not submitted

Assessment task 2

Tasks

1

2

Satisfactory Not satisfactory Not submitted

Comments/Further information:

ReassessmentRequired: Yes No

OverallResultC(Competent)CNA(Competency not achieved)

Student: I declare that I have been assessed in this task, in a fair and flexible manner. I have been provided with feedback on my performance

Student signature

Date

Assessor: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student, and I have provided appropriate feedback

Assessor signature

Date

Student Declaration

I declare that this assessment task is my own work and does not involve plagiarism, cheating or collusion.

I have acknowledged all material and sources used to prepare this assessment.

This assessment has not been previously submitted for assessment.

I give my consent for Skills Institute Australia to test any work submitted by me, using text comparison software (plagiarism software), for instances of plagiarism. I understand that this text comparison software may retain a copy of the item on its database for the purpose of future plagiarism checking by others.

I understand that any assessment deemed Not Yet Competent (NYC) will require me to undergo re-assessment and I may be required to complete a different assessment task.

I have made a photocopy or electronic copy of my assessment, which I can produce if the original is misplaced.

StudentssignatureDate

Task

Description

Assessment1

Part A:

ShortAnswerQuestions

Task

Description

Inthisassessment,youwilldemonstrateasoundknowledgeofthe unit requirements through completing and submittingwrittenquestions.

Youmustcorrectlyanswerallquestionstoshowthatyouunderstandtheknowledgerequiredofthisunit.

PartB:

PracticalAssessment

Assessment 2(WorkplaceProject)

Theworkplaceassessmentisdividedintotentasks:PartI.ProjectPlanning

1.1IdentifyResourceRequirements

1.2DeveloptheProjectBudget

1.3DeveloptheCostManagementPlan

PartII.ProjectImplementationandMonitoring

2.1MonitorActualProjectExpenditureAgainstBudget

2.2IdentifyProjectCostVariations

2.3MaintainFinancialObjectives

2.4PrepareFinancialReports

PartIII.ProjectClosure

3.1ConductProjectFinancialClosureActivities

3.2ReviewProjectOutcomes

3.3PrepareLessonsLearnedDocument

1. Listfivebudgetingprocessesthatshouldbestandardisedinworkplacebudgetingprocedures.

Budgetingprocesses

i.Fixed costs

ii. Variable costs

iii. Direct costs

iv. Indirect costs

v. Other costs

2. Belowaretoolsusedinprojectbudgetingprocesses.Explainhoweachtoolisusedinbudgetingprocesses.

Tools

Explanation

i. Spreadsheets

Spreadsheets, such as Microsoft Excel or Google Sheets, are commonly used in project budgeting due to their flexibility and ease of use. For example:

Budget Planning & Forecasting Creating detailed financial estimates, including cost breakdowns and expected expenses.

ii. Project managementsoftware/apps

Project management tools like Microsoft Project, Trello, Asana, or Primavera help with the budgeting process.

3. Belowaretwotechniquesusedindeterminingtheprojectbudget.Describeeachtechniqueinthecontextofbudgeting.

Technique

Description

i. Costaggregation

Cost aggregation is a budgeting technique where individual cost elements or estimates for specific work packages or project activities are compiled and combined to create a total project cost estimate.

ii. Reserveanalysis

Reserve analysis is a budgeting technique used to account for uncertainties, risks, and unknowns that may affect the project cost. I

4. Belowaremethodsusedtoestimateprojectcosts.Describehoweachmethodworksforestimatingprojectcosts.

Costestimationmethod

Description

i. Bottom-upestimating

Bottom-up estimating is the process of estimating the value of small components and then adding them up to estimate a total cost. It is typically used in calculating the cost of labour by identifying the cost of each work package in the Work Breakdown Structure.

ii. Parametricestimating

This form of estimating uses a relationship between variables and historical data to calculate the cost. For example, if you know the unit cost or duration and number of units required, you can estimate the total cost so long as the variables are scalable.

Parametric estimating is widely used in construction.

iii. Three-pointestimating

Three-point estimating is the method of estimating from optimistic, pessimistic and most- likely values. Two commonly used methods for three-point estimates are beta and triangular.

5. Listthreetoolsusedtoestimate projectcosts.

Costestimationtools

i. Estimating software

ii.Previous project costs and estimates

iii.Organisational forms and templates developed to estimate costs

6. Belowaremethodsusedtoanalyseprojectcosts.Describehoweachmethodworksforanalysing projectcosts.

Costanalysismethod

Description

i. Top-down costanalysis

In the top-down cost analysis, internal documentation relevant to costs is gathered and

analysed. The information contained in these documents is compared for consistency with

financial statements and audit reports.

ii. Bottom-up costanalysis

In the bottom-up cost analysis, personnel who are involved in the project are interviewed, and

project processes are observed as they happen. This approach allows you to get a firsthand

idea of the different factors that go into driving up the projects costs.

iii. Analogousestimating

In analogous estimating, values related to finances such as cost, and budget are used from

previous, similar projects as the basis to determine cost variations. Using this method, actual

values are used from previous, similar projects against estimated values in the current project

iv. Computation

In this method, the cost variations are determined by calculating the difference between the

Earned Value (EV) and the Actual Cost (AC). The resulting cost variation may be positive or

negative.

7. Listthreetoolsusedtoanalyseprojectcosts.

Costanalysistools

i.Cost benefit analysis software

ii.Expenditure tracking software

iii.Experts to seek expert advice

8.Listed below are different strategies to manage project costs.Foreach strategy:

i.Describeeachstrategyinthe contextofmanagingprojectcosts

ii.Provideoneexampleofa situationwherethestrategycanbe applied

Cost managementstrategies

Description

Application

i. Earned valuemanagement

Earned Value Management (EVM) is a project cost management technique that integrates project scope, schedule, and cost to measure performance and progress.

A construction company is building a bridge with a total budget of $5 million. By the halfway point, they planned to have spent $2.5 million (PV), but they have actually spent $3 million (AC). If the value of completed work (EV) is only $2 million, this indicates a cost overrun, and corrective action is needed.

ii. Forecasting

Forecasting in project cost management involves predicting future financial performance based on past and present data. It helps managers anticipate cost overruns and make adjustments before they become critical.

Software development firm tracks its monthly expenditures and realizes that costs are rising faster than planned. Using forecasting, they predict that continuing at this rate will exceed the budget by 20% and decide to reallocate resources to stay within limits.

iii. Performancereviews

Performance reviews involve regularly assessing project cost performance to ensure alignment with the budget. These reviews help identify cost variances, inefficiencies, and areas for improvement.

A marketing campaign project is scheduled for a quarterly performance review. The team identifies that spending on digital ads is higher than expected, leading to a cost variance.

To correct this, they adjust their ad placement strategy to reduce unnecessary expenses.

9. Listthreeprocessesfollowedonaprojectthatenableyoutoreviewcostsagainstactualoutcomes.

Processes

1.i.Cost monitoring and control

ii. Earned Value Analysis (EVA)

iii.Financial Reporting and Performance Reviews

ThetasksincludedinthisWorkplaceAssessmentmustbecompletedwithinthecontextofaprojectyouaremanaging.

Foryourassessorsreference, completethetablebelowbyprovidingtherequireddetailsandinformationoftheprojectyouareundertakingforthisassessment.

Candidatesname

Claudio Capparelli

Workplace/organisation

Claude Civil PTY

Projectname

Bridgeland 2030

State/territory wheretheprojectisbeingundertaken

Western Australia

Overviewoftheproject

TheBridgelandproject involves the design and construction of a arch bridgein order to connect five rivers dividing the area to the surrounding population area. The project aims to enhance transportation connectivity, improve traffic flow, and ensure safety for pedestrians and vehicles. Key phases include site analysis, structural design, material selection, environmental impact assessment, construction, and final inspections. This bridge will comply withall local health and safety procedus and have been approved by relevant parts to ensure durability and sustainability. Upon completion, the bridge will providereduced travel time, economic growth, improved infrastructure, etc.

Candidates role/title in thisproject

Project Manager

Datescopingstagecommenced

24.11.2023

Dateplanningstagecommenced

19/07/2024

Projectsponsor/client

WA Government and private companies

Candidatesname

Workplace/organisation

Projectname

State/territory where theprojectisbeingundertaken

Overviewof theproject

Candidatesrole/titleinthisproject

Datescopingstagecommenced

Dateplanningstagecommenced

Projectsponsor/client

1.Accessandreviewproceduresinyourorganisationrelevanttocostvariations.

Answer the following questions about the task, using these procedures asreference.

Aftercompletingthistask, submitcopiesof theproceduresyoureviewedtoyourassessor.

i.Outlinetheprocedurefollowedinyourorganisationforidentifyingcostvariationsonaproject.

ii.1.Monitoring and tracking costs

iii.2.Regular financial reporting

iv.Identifying causes of variation

ii. Basedontherelevantprocedureoutlined,identifyonetooltobeusedwhenidentifyingcostvariationsonaproject.

Cost Tracking Spreadsheet

How It Helps Identify Cost Variations:

1.Create Budget Categories:

oList all the project costs in categories such as labor, materials, equipment, and other expenses.

2.Track Actual Costs:

oRecord the actual costs for each category as the project progresses.

3.Calculate Variations:

oIn a separate column, calculate the cost variancefor each category by subtracting the budgeted costfrom theactual cost:

• Cost Variance (CV)= Actual Cost - Budgeted Cost

oA positive number indicates a saving, while a negative number indicates

iii.Outlinetheprocedurefollowedinyourorganisationforevaluatingcostvariationsonaproject.

-Monitoring project costs and identifying cost variations.

iv.Basedontherelevantprocedureoutlined,identifyonetooltobeusedwhenevaluatingcostvariationsonaproject.

-Cost Variance Report (CVR)

v.Outlinetheprocedurefollowedinyourorganisationforidentifyingcostvariationsonaproject.

1.Estabilishing Baseline Budget

2.Continous Monitoring of Project Costs

3.Identifying cost variations

vi.Basedontherelevantprocedureoutlined,identifyonetooltobeusedwhenidentifyingcostvariationsonaproject.

Cost Variance Report (CVR)

The Cost Variance Report (CVR)is a tool designed to track and analyze the difference between planned costsandactual costsincurred during a project.

The CVR provides a detailed breakdownof the projects budgeted costs versus actual expenses, helping project managers and teams to quickly identify and evaluate cost variations.

Why Its Useful:

Clear Overview: The CVR provides a quick and clear view of how actual costs are diverging from the planned budget.

vii.Outlinetheprocedurefollowedinyourorganisationforevaluatingcostvariationsonaproject.

1. Identifying Cost Variations

Track Actual vs. Planned Costs:As the project progresses, actual costs are continuously monitored against the original or baseline budget.

Variance Identification:Cost variations are identified when actual costs exceed the planned budgeted costs or when savings are realized. The Cost Variance Report (CVR)or similar tools can be used for this purpose.

2. Documentation of Cost Variations

Record Variations:All cost variations are documented in the projects Cost Variation Logor Change Request Log. This includes:

oCause of the Variation: Why did the variation occur (e.g., scope change, unexpected material price increases, delays, etc.)?

oAmount of the Variation: The financial impact of the variation.

oDate of Occurrence: When the cost variation was identified.

oCost Category: Which category the variation falls under (e.g., labor, materials, equipment).

3. Reviewing Cost Variations

Initial Evaluation by Project Manager:The project manager reviews each cost variation for validity and assesses its impact on the projects overall budget and schedule.

Stakeholder Consultation:The project manager discusses variations with relevant stakeholders (e.g., project team, contractors, suppliers) to understand the underlying causes and whether the variation is justified.

4. Analysis of Impact on Project

Financial Impact Assessment:Evaluate whether the cost variation will significantly affect the projects overall budget. Determine if theres a risk of cost overruns or if corrective actions are required.

Timeline Impact:Assess whether the cost variation will affect the project timeline or require additional resources.

Risk Assessment:Review if the variation introduces new risks, such as further delays, rework, or resource shortages.

5. Approving Cost Variations

Internal Review:After the evaluation, the cost variation is reviewed internally by senior management, the finance team, or the project sponsor, depending on the size and significance of the variation.

Approval Process:For larger variations or those impacting key project milestones, formal approval is required before any corrective actions or budget changes are implemented.

Client Approval (if applicable):If the project involves external clients or sponsors, their approval may be necessary before adjusting the budget or making changes.

6. Implementing Corrective Actions (if necessary)

Budget Adjustments:Once approved, the projects budget is updated to reflect the cost variation. This may involve reallocating funds, adjusting contingency reserves, or revising the Estimate at Completion (EAC).

Project Plan Updates:If the variation impacts project scope or timeline, adjustments are made to the overall project plan, and resource allocation is reviewed.

7. Communicating Cost Variations

Stakeholder Notification:Inform relevant stakeholders, including clients, senior management, and the project team, about the identified variations, their impact, and any corrective actions being taken.

Transparency:Ensure that all parties are aware of the changes to the budget and timeline, and understand the reasons behind these adjustments.

8. Monitoring and Reporting

Ongoing Evaluation:Continue to monitor the projects costs throughout the project lifecycle, ensuring that any further cost variations are promptly identified and evaluated.

Regular Reports: Provide regular updates (e.g., monthly financial reports or status meetings) to track the projects financial health and ensure all cost variations are managed appropriately.

viii.Basedontherelevantprocedureoutlined,identifyonetooltobeusedwhenevaluatingcostvariationsonaproject.

Cost Variance Analysis (CVA) Report

How It Works:

The Cost Variance Analysis (CVA)report is a tool specifically designed to evaluate and quantify the differences between planned costs(budget) and actual costsincurred during the project. It helps identify if a project is under or over budget, and allows project managers to evaluate the reasons for these differences.

Key Components of the CVA Report:

1.Planned Costs (Budgeted Costs):

oThe original budget or forecast for each project element (labor, materials, overheads, etc.).

2.Actual Costs:

oThe real costs incurred for each project element up to the evaluation date.

3.Cost Variance (CV):

oThis is the difference between actual costs and planned costs, calculated as:

• Cost Variance (CV) = Actual Cost (AC) - Planned Cost (PC)

oA positiveCV indicates savings, while a negativeCV indicates a cost overrun.

4.Variance Percentage:

oThis can also be calculated to understand the proportion of the variance in relation to the planned cost, which helps in assessing the severity:

• Variance Percentage = (Cost Variance / Planned Cost) * 100

5.Cause of Variations:

oA brief explanation of the reason behind the variation (e.g., scope changes, delays, price increases, etc.).

Why Its Useful:

Clear and Simple:Provides a straightforward view of the cost discrepancies, highlighting whether the project is on track or off course financially.

Actionable Insights:The CVA report helps project managers quickly assess if corrective actions are necessary to stay within budget or if adjustments need to be made in resource allocation.

Informed Decision-Making:This tool provides project stakeholders with accurate financial data, enabling them to make informed decisions regarding project scope, timeline, and funding.

i. Brieflydescribeallthepoliciesinyourorganisationthatarerelevanttothecostmanagementdutiesofaprojectmanager.

Youmustdescribeaminimum oftwopolicies.

1.Budgeting and cost control policy, for example budget preparation.

2. Change management and variation policy, i.e change identification and cost evaluation.

ii. Outlinealltheproceduresfollowedinyourorganisationthatarerelevanttothecostmanagementdutiesof aprojectmanager.

Youmustoutlineaminimumof two procedures.

1.Budgeting and Cost Estimation Procedure

2.Cost Monitoring and Control Procedure

iii.Brieflydescribeallthepoliciesinyourorganisationthatarerelevanttothecostmanagementdutiesofaprojectmanager.

Youmustdescribeaminimumoftwopolicies.

1. Budgeting and financial management policy

2. Change Control and Cost Variations Policy

iv.Outlinealltheproceduresfollowedinyourorganisationthatarerelevanttothecostmanagementdutiesofaprojectmanager.

Youmustoutlineaminimumoftwoprocedures.

1. Budget preparation and approval procedure

2. Cost monitoring and control procedure

Theworkplaceassessmentisdividedintotentasks:

PartI.ProjectPlanning

1.4IdentifyResourceRequirements

1.5DeveloptheProjectBudget

1.6DeveloptheCostManagementPlan

PartII.ProjectImplementationandMonitoring

2.5MonitorActualProjectExpenditureAgainstBudget

2.6IdentifyProjectCostVariations

2.7MaintainFinancialObjectives

2.8PrepareFinancialReports

PartIII.ProjectClosure

3.4ConductProjectFinancialClosureActivities

3.5ReviewProjectOutcomes

3.6PrepareLessonsLearnedDocument

Thesetasksmustbedoneinthecontextofaprojectwhichyouarecurrentlyapartof.

E.g.Youaretheprojectcoordinatororprojectmanagerinthisproject.

Eachtaskcomeswithasetofinstructions.Youaretofollowandperformtheseinstructionswhilebeingobservedbytheassessorandsubmitanyrequireddocumentation.

Beforestartingthisassessment,yourassessorwillalso discuss withyouthesetasksaswellasinstructions and guidance for satisfactorily completing them. They will also organise theresourcesrequiredforthisassessment(listedbelow).

Youarerequiredto:

• Completethetaskswithinthetimeallowed,asscheduledin-classroll.
• Determineprojectcosts.
• Monitorandcontrolprojectcosts.
• Completecost-managementprocesses.

Workplacetemplatesfor:Yourassessorwillprovidethe belowtemplates

• Documentingresourcerequirementsandcostestimation
• Developingtheprojectbudget
• Developingthecostmanagementplan
• Conductingcostvarianceanalyses
• Financialreporting
• Reviewingprojectoutcomes
• Documentingthelessonslearned
• Meetingminutes

You are also required to estimate costs based on resource requirements identified for eachtaskintheWBS.Thismaybedoneseparatelyfromyourmeetingwiththestakeholders.

Use your organisations template for documenting resource requirements for project tasks,or you may use theGeneric WBS & Resource Cost Estimationtemplate provided by thetrainer.

Youwillbeassessedon:

• Practicalknowledgerelevanttoresourcerequirementsandcostsforaproject.
• Practicalskillsrelevanttoidentifyingresourcerequirementsinconsultationwithprojectstakeholders.
• Practicalskillsrelevanttoestimatingprojectcosts.

Aftercompletingthistask,submitthefollowingtoyourassessor:

• Thedocumentationofresourcerequirementsandcostestimationthatyoucompletedor the completedGenericWBS&ResourceCostEstimationtemplate.
• TheWBSthatyouaccessedtocompletethistask.

• Copiesofotherprojectdocumentsyouusedasareferencetocompletethistask.

Implementtwoprocessesandtheircorrespondingprocedurestomonitoractualexpenditureagainstthebudget.

The processes and procedures you will implement for this task will depend on therequirements as well as the cost management plan established for the project you areundertaking. They may include but are not limited to a weekly review of the projectsperformance, e.g. reviewing hours spent on the project, reviewing project progress againstschedule, tracking expenses and project performance using spreadsheets or projectmanagementsoftware,etc.

Secure documentation from your implementation of these processes as you will submitthem as part of this assessment. The documentation you submit may include but are notlimitedtocopiesofspreadsheetsitemisingexpensesagainstbudget,projectstatusreports whichdocumenttheoutcomesofyourmonitoringoftheprojectexpenditure,copiesofcostforecastsandworkperformancereportsyoucreatedaspartofyourcompletionofthistask.

Youwillbeassessedon:

• Practicalknowledgeoffinancial-managementprocessesandproceduresformonitoringactualexpenditureagainstbudget
• Practicalskillsrelevanttoimplementingtheseprocessesandprocedures.

Aftercompletingthistask,submitthefollowingtoyourassessor:

• Copiesofdocumentationofyourimplementationofthetwofinancialmanagementprocessesandprocedures
• Copy or excerpt of the project cost management plan/project management planwheretheseprocessesandproceduresareoutlined.

OverallResultforthisWorkbook

S

NYS

OverallResult

o

o

Assessorscomments/feedback

Assessor Declaration

I declarethat theresultsrecordedinthisRecord of Assessmentaretrueandaccurate.

Assessorsname

Assessorssignature