BUDGET COST

In project management and financial contexts, the "Budgeted Cost" refers to the estimated or
planned cost for completing a specific project or activity. This cost includes all the expenses that
are anticipated to be incurred during the project lifecycle, such as materials, labor, equipment,
and overheads. The budgeted cost is a key component in project planning and control, helping
organizations allocate resources and manage financial performance.

Components of Budgeted Cost

1. Direct Costs:
o Labor Costs: Wages and salaries of the project team members.
o Material Costs: Expenses for raw materials and supplies needed for the project.
o Equipment Costs: Costs for machinery and tools used in the project.
2. Indirect Costs:
o Overheads: General administrative expenses that are not directly tied to the
project but are necessary for overall operations.
o Utilities: Costs for electricity, water, and other utilities used during the project.
3. Contingency Costs:
o Additional funds set aside to cover unexpected expenses or risks that may arise
during the project.