Project Cost Glossary
Plain-language definitions for common estimating, budgeting, earned value, risk and cost-control terms.
Actual Cost (AC)
The cost recorded for work performed during a stated period.
Analogous Estimate
An estimate based on one or more comparable completed projects, adjusted for meaningful differences.
Basis of Estimate
The document that explains scope, methods, data, assumptions, exclusions, uncertainty and the date basis behind an estimate.
Baseline
An approved, time-phased reference used to measure and control project performance.
Benchmark
A normalized reference point used to compare cost, productivity, duration or performance.
Bottom-Up Estimate
An estimate built from detailed quantities, work packages, resource needs and unit rates.
Budget at Completion (BAC)
The total approved budget for the work measured under earned value management.
Capital Cost
A cost associated with acquiring, constructing or substantially improving a long-lived asset.
Cash Flow
The timing of expected or actual payments, receipts, commitments or expenditures.
Change Control
The process used to evaluate, approve, fund and record changes to scope, schedule or budget.
Contingency
An allowance for identified risks and estimating uncertainty within the approved project scope.
Cost Breakdown Structure (CBS)
A hierarchical arrangement used to organize project costs into meaningful categories or control accounts.
Cost Driver
A quantity, rate, condition or technical choice that materially influences total cost.
Cost Performance Index (CPI)
Earned value divided by actual cost. A value below 1.0 indicates less value earned per unit of cost than planned.
Cost Variance (CV)
Earned value minus actual cost. A negative result indicates cost performance worse than the earned value position.
Direct Cost
A cost that can be traced reasonably and consistently to a specific project, activity or deliverable.
Discount Rate
The rate used to convert future costs or benefits into present-value terms.
Earned Value (EV)
The budgeted value of work actually completed by the measurement date.
Earned Value Management (EVM)
A method that integrates scope, schedule and cost information to measure performance and forecast outcomes.
Estimate at Completion (EAC)
The current forecast of total project cost when the work is finished.
Estimate to Complete (ETC)
The forecast cost of the remaining work from the status date to completion.
Escalation
An adjustment for expected changes in price levels over time.
Fixed Cost
A cost that does not change directly with the selected activity or output level within a relevant range.
Forecast
A current prediction based on approved scope, actual performance, remaining work and known risk.
Indirect Cost
A cost that supports more than one project, activity or cost objective and must be allocated using a reasonable basis.
Lifecycle Cost
The present or total cost of acquiring, operating, maintaining, replacing and disposing of an asset over a defined period.
Management Reserve
Budget held outside the performance baseline for unknown or broader management risk, according to the organization’s rules.
Most-Likely Estimate
The value judged most probable among a range of possible outcomes.
Operating Cost
A recurring cost required to operate, support or maintain an asset or service.
Parametric Estimate
An estimate produced using a validated relationship between cost and one or more measurable characteristics.
Planned Value (PV)
The approved budget for work scheduled to be completed by a stated date.
Present Value
The value today of a future cost or benefit after discounting.
Price Date
The date or period to which the rates and prices in an estimate apply.
Schedule Performance Index (SPI)
Earned value divided by planned value. A value below 1.0 indicates less work completed than planned.
Scope Boundary
A clear statement of what work, interfaces, quantities and responsibilities are included or excluded.
Sensitivity Analysis
Testing how changes in important assumptions or inputs affect the result.
Three-Point Estimate
An uncertainty method using optimistic, most-likely and pessimistic values.
Total Cost of Ownership (TCO)
A lifecycle view of acquisition and ongoing costs associated with owning or using an asset.
Variance at Completion (VAC)
Budget at completion minus estimate at completion.
Variable Cost
A cost that changes with activity, output, quantity or usage.