Project Management in Practice Study Set 3

Project budget is nothing more than the project plan, based on the WBS, expressed in monetary terms.

A budget is a plan for allocating resources.

The project manager recognizes an expense when an invoice is actually paid.

Organizations can use both top-down and bottom-up budgeting.

Bottom-up budgets are usually more accurate in the detailed tasks.

Most organizations use top-down budgeting.

For projects with S-shaped life cycles, top-down budgeting is most likely unacceptable.

Individual elements of project budgets are generally more accurate in bottom-up budgeting.

Budget cuts are usually disastrous to an exponential life-cycle project.

Organizational tradition has little or no impact on the firm's project budgeting.

Top-down budgeting typically results in better acceptance of the budget.

Overhead and indirect charges should not be assigned to a project.

With top-down budgeting, overlooking a small but important task can often cause a serious budgetary problem.

A key advantage of top-down budgeting is that the overall budget costs can be estimated quite accurately.

Budgeting a project is often more difficult than budgeting routine activities.

Because project budgeting is for a special case and the organization's budgeting process is for routine work, the project manager need not be familiar with the organization's accounting system.

The project's budget is merely the sum of its resource costs.

Activity budgets show expenses by task and expected time period of the expenditure.

A budget is a plan for allocating resources to project activities.

The project budget acts as a project control.