Cost Baseline
The formally approved, time-phased budget for the project that excludes management reserves; it can only be modified through the formal change control process and serves as the benchmark for comparing actual cost performance.
Key Points
- Represents the authorized, time-phased plan for project spending.
- Excludes management reserves but includes contingency reserves.
- Changes are allowed only via formal change control.
- Used as the cost benchmark for tracking and Earned Value analysis.
Example
A $1.2M cost baseline is spread across 12 months. Midway through the project, actual costs run $30K over the plan in month 6. The team compares the variance to the baseline and requests a formally approved change to rephase funds due to supplier delays.
PMP Example Question
Which artifact is the time-phased plan for spending that excludes management reserves and is used to compare actual costs during execution?
- Cost Management Plan
- Project Budget
- Cost Baseline
- Performance Measurement Baseline
Correct Answer: C — Cost Baseline
Explanation: The cost baseline is the approved, time-phased budget excluding management reserves and is the reference for measuring actual cost performance.
