project, so the estimate was in line with that amount. The WBS Level 2 items, such as project management, hardware, software, and testing, also seemed to be at appropriate percentages of the total cost based on similar past projects. In some cases, a project team might also be asked to provide a range estimate for each item instead of one discrete amount. For example, the team might estimate that the testing costs will be between $60,000 and $80,000 and document their assumptions in determining those values. It is also important to update cost estimates, especially if any major changes occur on a project.After the total cost estimate is approved, the team can then allocate costs for each month based on the project schedule and when costs will be incurred. Many organizations also require that the estimated costs be allocated into certain budget categories, as described in the next section.
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