What are the proper cost accounting techniques to correctly distribute the baseline budget and actual cost of large costs

Earned Value Management

Panagiotis Mamakos Head of scheduling| METKA S.A. Maroussi, Greece

In Appendix G -Pitfalls and recommendations - of Practice standard for earned value management, in paragraph G.5.2. Discrete allocation of Large Costs, is suggested that proper cost accounting techniques should be used to correctly distribute the baseline budget and actual cost because large costs will dilute project performance or will generate high variations on the EVM metrics (PV/EV/AC).
Is there a specific suggestion on the subject?

Posted: Oct 21, 2015 9:31 AM

Ricardo Cantu Team leader, Risk and Benefits realization management| MTESS Quebec, Quebec, Canada

I think they are referring to the Activity-Based Costing technique.
Here, you need to identify the proper cost driver triggering costs.
So for EVM, you need to identify the proper measurement of the work, to time-phased plan for it, to account actuals (performed) and to evaluate progress.

Posted: Jan 9, 2016 9:57 AM

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What are the proper cost accounting techniques to correctly distribute the baseline budget and actual cost of large costs

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