What is Project Budgeting

To establish project budgeting, you have to take into consideration 2 cost categories and specific components.

The costs are usually divided into:

• Fixed costs. Their budget part is not going to change and is constant for the entire project completion. This can include monthly service costs or a price quote.

• Variable costs. These can change based on how much time or resources it takes to complete the project. If the employee has an hourly payment, and you estimate it will take 30 hours of work to complete the project, yet it took 40, the said overtime is a variable cost.

The specific components include the following:

• Labor costs. These include all the payments to the employee, including wages, overtime, and benefits.

• Material costs. You have to calculate all the materials required for the project.