1. Project Costing & Cost Risk

2. Business is a game And we use money to keep score

3. Project cost estimating Bottom (task) up Cost tasks by –Direct Labor (you $30/hr) –Labor overhead 150% DL –Other Direct Costs (parts, services) 100% –General Overhead & Administration 20% DL+OH+ODC –Fee 10% everything

4. Network Example start Write spec Order hardware Hardware Write code Integrate hardware Install code Integrated system test 3wks 6wks 4wks 2wks

5. Project Cost Estimate

6. Cost Risks Labor overruns – schedule slips Supply price increases Unexpected costs

7. Costs Key to profit Estimate in smallest possible chunks Accountant’s categories Minimize risks