BSBPMG533 Project Cost Management Plan v1.0-example
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School
Australian Institute of Management *
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Course
BSBPMG533
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
docx
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3
Uploaded by UltraHorse3324
Manager Networks
Project Cost Management Plan
Introduction
Outline the purpose of the cost management plan in relation to the project.
Response should broadly cover:
This Cost Management Plan has been developed to ensure effective and efficient cost
management of the conference. It:
●
Outlines the costs of the project
●
Describes factors that could increase costs
●
Describes cost control procedures
Financial objectives
Include the financial objectives of the project and any actions required to maintain the financial
objectives.
Response should broadly cover:
The CFO has set a net profit target of $200,000. All expenses should be accounted for at the
completion of the project.
Team agrees to:
●
fortnightly meetings and updates
●
flag any variations to expected costs immediately
●
obtain at least three quotes.
Resource requirements and cost
Summarise the major resources requirements, including the estimated and maximum allowable
costs.
Response should broadly cover:
Resource
Estimated Cost
Maximum allowed cost
Venue
$
70,000.00
$
80,000.00
Equipment hire
$
25,000.00
$
27,000.00
Staff time
$
10,000.00
$
16,000.00
Page 1
Catering
$
15,000.00
$
20,000.00
Speaker travel
$
6,000.00
$
10,000.00
Speaker fees
$
14,000.00
$
14,000.00
Registration software
$
5,000.00
$
6,000.00
Marketing and entertainment
$
10,000.00
$
13,000.00
Printing
$
4,000.00
$
5,000.00
Courier
$
2,000.00
$
4,000.00
Total
$
161,000.00
$
195,000.00
Processes and procedures for monitoring actual expenditure against the
budget
Describe the processes for monitoring the actual expenditure (include recording of expenses).
Team agrees to:
●
fortnightly meetings and updates
●
flag any variations to expected costs immediately
●
request permission from CFO for material changes
●
record and monitor expenditure as it occurs.
Potential causes of increases in costs
Describe at least three factors that need to be considered that would increase costs.
Response should be:
●
Speakers fees e.g. speakers decline the $2,000 fee offered and seek higher fees.
●
Marketing promotions are higher than anticipated.
●
Outside contractors are required to assist with the conference effort.
●
Registration software is higher than expected.
●
Additional items are added to the conference program.
Project cost control procedures
Describe cost control management processes that will be followed.
Complete the table below to show allowable variations in costs and approval requirements.
Project costs will be controlled as follows:
Page 2
Costs will be monitored on a weekly basis.
Any variations will be assessed on the following basis:
Variation rate
Action
0 – 5%
Report variance and explanation of cause
5 – 20%
Further commitment to additional costs must
be approved the by Project Manager (or CFO
is material)
20 – 45%
Further commitment to additional costs must
be approved by the Senior Management Team
45% plus
Project must be stopped and reconsidered
Where a cost variation is considered, the project cost management plan is to be updated.
Page 3
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