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techniques, but they’re also the most time-consuming to perform.

When I discussed schedule planning in Chapter 5, I talked about calculating duration

estimates for each task to determine the length of time your project will take. When
you are calculating cost estimates, you need to base the estimate on work effort, which
is the total time it will take for a person to complete the task if they do nothing else
from the time they start until the task is complete. For example, assume a task to
perform technical writing has an activity duration estimate of four days. When you
perform cost planning, you need to know the actual number of hours spent performing
the task. So, let’s say the technical writer is allocating 5 hours a day to the project over

the course of 4 days. The work effort estimate is 5 hours a day multiplied by 4 days,
which equals 20 hours.

The duration estimates that you complete in schedule planning help you
define how long the project will take to complete. The work effort estimates that
you obtain in cost planning are used to define how much the project will cost.

The final piece of data you need for a bottom-up estimate is the rate for each resource.

Rates for labor and leased equipment are typically calculated on an hourly or daily
rate, while the purchase of materials or equipment will generally have a fixed price.

Deciding the correct rate to use for cost estimates can be tricky. For materials or
equipment, the current cost of a similar item is probably as accurate as you can get.
The largest cost for many projects is the human resource or labor cost. The actual rate
that someone will be paid to perform work, even within the same job title, can fluctuate
based on education and experience level. If you’re procuring contract resources, you’ll

get a rate sheet that describes the rates for a given job title and the resource’s travel
rates if they’re coming from out of town.

Table 7.1 shows the work effort and rate assigned for each of the resources in a sample
project.

TABLE 7.1 Sample project resource rates

Task Resource Work Effort Rate

4.1.1 Tech writer 20 hours $30/hr

4.1.2 Programmer 100 hours $150/hr
4.1.3 Server Fixed rate $100,000

4.1.4 Testers 60 hours $80/hr

4.1.5 Programmer 200 hours $150/hr

4.1.6 Marketing 30 hours $60/hr

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