Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated: 1 1 00:00:01,067 --> 00:00:04,255 Now, let's look at the practical essentials 2 2 00:00:04,255 --> 00:00:08,922 of preparation of the project budget, the cost baseline. 3 3 00:00:09,764 --> 00:00:13,611 So we've got scope and schedule well planned. 4 4 00:00:13,611 --> 00:00:15,534 Let's complete the triple constraint 5 5 00:00:15,534 --> 00:00:18,728 and baseline the project cost. 6 6 00:00:18,728 --> 00:00:20,288 Cost estimates are obtained 7 7 00:00:20,288 --> 00:00:23,032 from the deliverable activity breakdowns, 8 8 00:00:23,032 --> 00:00:24,680 a sum of the personnel costs 9 9 00:00:24,680 --> 00:00:27,180 and any material and services. 10 10 00:00:28,345 --> 00:00:30,940 The key is, to make sure the activity breakdowns 11 11 00:00:30,940 --> 00:00:35,512 include all the work that generates direct cost. 12 12 00:00:35,512 --> 00:00:38,331 Including all the variable costs, 13 13 00:00:38,331 --> 00:00:40,386 those dependent on the amount of effort 14 14 00:00:40,386 --> 00:00:42,711 and will be greater if the work increases. 15 15 00:00:42,711 --> 00:00:46,465 Such as: people times time times rates, 16 16 00:00:46,465 --> 00:00:49,051 equipment rental times time, 17 17 00:00:49,051 --> 00:00:50,947 printing times copies, 18 18 00:00:50,947 --> 00:00:52,654 travel times trips, 19 19 00:00:52,654 --> 00:00:55,902 paint times square feet, etcetera. 20 20 00:00:55,902 --> 00:00:58,983 And include all the fixed costs, 21 21 00:00:58,983 --> 00:01:02,445 the one time expenditures per deliverable. 22 22 00:01:02,445 --> 00:01:03,444 Such as purchase of 23 23 00:01:03,444 --> 00:01:07,679 any computers, equipment, furniture, etcetera. 24 24 00:01:07,679 --> 00:01:10,727 Deliverable estimates should not include 25 25 00:01:10,727 --> 00:01:13,557 any overhead or indirect costs 26 26 00:01:13,557 --> 00:01:16,207 because they are already included 27 27 00:01:16,207 --> 00:01:19,235 in the rates for the direct costs. 28 28 00:01:19,235 --> 00:01:21,596 That is, these are all the costs 29 29 00:01:21,596 --> 00:01:22,978 that would be too much trouble 30 30 00:01:22,978 --> 00:01:25,194 to calculate and track individually. 31 31 00:01:25,194 --> 00:01:27,048 Usually including items like office rent, 32 32 00:01:27,048 --> 00:01:29,375 electricity, and office supplies 33 33 00:01:29,375 --> 00:01:30,945 and support from departments 34 34 00:01:30,945 --> 00:01:33,992 like IT, QA, contracts, legal, 35 35 00:01:33,992 --> 00:01:36,863 shipping and receiving, etcetera. 36 36 00:01:36,863 --> 00:01:40,927 Instead these costs are calculated once a year, 37 37 00:01:40,927 --> 00:01:44,542 organization wide, and included by the finance department 38 38 00:01:44,542 --> 00:01:47,556 in the cost of the direct items. 39 39 00:01:47,556 --> 00:01:49,500 For example, this is why rates 40 40 00:01:49,500 --> 00:01:52,058 are so much higher than salary. 41 41 00:01:52,058 --> 00:01:55,293 Since indirect costs are covered by the margin 42 42 00:01:55,293 --> 00:01:57,206 in the direct costs 43 43 00:01:57,206 --> 00:01:58,682 you don't have to worry about them 44 44 00:01:58,682 --> 00:02:00,599 in the project costing. 3611