QS ADVANCE COST ANALYSIS

Cost estimate

a prediction of the resources and money needed to complete defined work.

Budget

the approved amount allocated for a project or activity.

Actual Cost (AC)

cost already incurred for work performed.

Budget baseline

the approved time-phased budget used to compare performance.

Contract price

the amount agreed in the contract, subject to its terms and adjustments.

Indirect cost

cost supporting the project but not easily assigned to one work item, such as site utilities.

Overhead

general business or project-support expenses, depending on the estimate structure.

Contingency allowance

an allowance for identified uncertainty and risk; not simply extra profit

profit

the amount remaining for the contractor after applicable costs and expenses.

Bill of Quantities (BOQ)

a structured list of work items, descriptions, units, and quantities

Unit cost

the cost of one unit of completed work.

Unit rate

the price per unit used in pricing or measurement; check what it includes.

Resource cost

the cost of labor, materials, equipment, and other resources.

Cost driver

a factor that causes cost to change, such as quantity, wage rate, waste, or equipment hours.

Labor productivity

the amount of work produced per unit of labor input.

Cost variance

the difference between a reference cost and cost being compared

Cost overrun

spending or forecast cost exceeds the relevant budget or approved amount.

Cost underrun

spending or forecast cost is below the relevant budget or approved amount.

Forecast final cost

the latest prediction of total cost when the project is complete.

Estimate at Completion (EAC)

forecast of total project cost based on actual performance and remaining work.

Estimate to Complete (ETC)

estimated cost required to finish the remaining work.

Sensitivity analysis

tests how changes in one input affect the result.

Scenario analysis

compares results under different sets of assumptions.

Life-Cycle Cost Analysis (LCCA)

compares costs over an asset's life, including operation and maintenance.

Value engineering

a structured review to achieve required function at an appropriate life-cycle cost.

Prolongation cost

additional time-related cost caused by extended project duration.

Rework

work repeated or corrected because it did not meet requirements.

Cost analysis asks

Why is the cost changing, what does it mean, and what should we do?

Estimating output

a cost prediction based on quantities, rates, productivity, and assumptions.

Analysis output

an explanation, forecast, risk assessment, and recommended action.

Indirect/project costs

site management, temporary facilities, safety, utilities, and other support costs.

Company overhead

business-wide expenses allocated according to the estimating method.

Contingency

allowance for uncertainty and risk, managed under project rules.

Profit

the contractor's intended return after costs and applicable expenses.

Resource prices

cement, steel, fuel, equipment rental, or wages increase.

Productivity

crew output falls due to congestion, weather, poor planning, or skill gaps.

Waste and rework

incorrect installation, damage, or repeated work consumes extra resources.

Time

delays can extend supervision, equipment rental, temporary facilities, and financing costs.

EAC

total cost expected by project completion.

ETC

expected cost of the remaining work.

Cost cutting

reduces initial spending, sometimes by reducing quality or performance.

Value engineering

examines function, performance, safety, durability, and cost together.

LCCA

considers initial cost plus relevant operation, maintenance, replacement, and end-of-life costs.

Direct cost

cost clearly attributable to a specific work item, such as concrete, rebar, or installation labor

price escalation

an increase in resources over time

Estimating asks

How much should this work cost?

Quantity changes

additional scope, design revisions, or measurement errors.

Direct costs

materials + labor + equipment + subcontracted work tied to specific activities.

Forecast final cost

the latest estimate of total cost at completion