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What Is a Cost Baseline in Project Management? A Quick Guide

Marshall Simmons
Publication date:
September 2, 2021
Article Summary: 

What Is a Cost Baseline in Project Management? A Quick Guide

A cost baseline is the budget that has been approved for the project, broken down into a list of salaries, materials, equipment and more. It is used to compare planned spend to actual spend and make cost estimates for each task. To create a project budget, you need to add a management reserve, which is used as a contingency reserve for management control and unexpected costs. Ideally, the cost estimates and actual project costs numbers should match or be lower than the cost baseline. A cost baseline is the authorized spending plan for a project, which includes every project activity, task and associated resources.

It should be set between the project planning phase and the start of executing the project and cannot be changed unless there is a major change in the project scope, resources or cost estimates. Setting a cost baseline is important because keeping to your project budget is important and going over budget can lead to unhappy stakeholders.


cost baseline, cost estimates, cost control, contingency reserve, project budget, management reserve

Source Citation: 
Marshall Simmons
What Is a Cost Baseline in Project Management? A Quick Guide
September 2, 2021
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