Question

you are writing the closeout report for a project you are managing. you observe that your project plan called for an $80,000 budget, but actual costs totaled $87,500. you note how the majority of extra costs were due to unexpected increases in the price of materials. which part of your closeout report is the best place to document this information?

Answer 1

The best place to document the actual costs and the reasons for cost overruns, such as the unexpected increases in material prices in a project closeout report, would be in the cost management or financial summary section. Here you would detail the financial discrepancies between the planned and actual budget and draw conclusions about the estimated versus actual costs.

Step-by-step explanation:

When writing the closeout report for a project where the actual costs exceeded the planned budget, it is essential to document why these overages occurred. You specified that the actual costs totaled $87,500 compared to the estimated $80,000 budget, with the rise primarily due to unexpected increases in the price of materials. The best place to document this information would be in the section of the closeout report dedicated to cost management or the financial summary. This section discusses the initial financial assumptions, the final costing statement, and explanations for variance.

It is important to draw a conclusion regarding whether the results supported the estimated times and to discuss any unexpected outcomes. Specific events that led to the increase in material costs should be detailed, as they are crucial for understanding the project's financial variances. This information is valuable not only for this project's records but also for planning future projects more accurately.

Answer 2

The 'Financial Summary' section of the closeout report is the correct place to document the observed cost overrun due to unexpected increases in material prices. This section allows for an analysis of the budgetary outcomes and the impact of unexpected events influencing the project's costs.

Step-by-step explanation:

When writing the closeout report for a project where the actual costs exceeded the projected budget, it's important to document this variance in the 'Financial Summary' section of the report. This is the best place to draw a conclusion about the difference between your estimated costs and the actual costs of $87,500, specifically noting that the unexpected increases in the price of materials were the primary reason for the additional $7,500 in expenses.

The financial summary should provide a clear and comprehensive analysis of the budgetary outcomes. Considering the project plan called for an $80,000 budget, it's critical to discuss the unexpected events and external factors, like market price changes, that contributed to the cost overruns. This evaluation helps in understanding how the project fared financially and in making improvements for future project estimates and risk management.