Estimate cost will ALWAYS include direct cost and either indirect cost to be included is to be decided. but C is saying either of them. Please clarify


Question 14

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Martin, project manager is in planning phase for his project. Team is estimating cost for project. What is true?

Estimate cost should always include all direct costs and indirect costs

Estimate cost should include all direct and/or indirect costs based on what Steering Group approves and should be documented

Estimate cost should include direct and indirect cost or either of them based and assumption made should be documented

Estimate cost should include direct and indirect cost or either of them as described in project charter
- Solution
Page 202,

While estimating cost for project, PM has to make assumption on if indirect costs need to be part of estimates. There is no mandatory guideline for including or excluding indirect cost. Project charter does not have any guideline on estimate cost. Unless PM wants to approach SG for approval there is no mandate for SG to approve. Usually document accounting procedure in organization would help PM to know how to deal with indirect cost.