According to the PMBOK® Guide, the Plan Cost Management process creates the Cost Management Plan, which is a subsidiary of the Project Management Plan. This document defines how the project costs will be planned, structured, and controlled. It does not contain the actual dollar amounts (estimates) but rather the rules for managing them.
Control Thresholds (Choice D): This is a key component of the Cost Management Plan. Control thresholds are variance thresholds (typically expressed as a percentage) that specify the allowed amount of variation before some action needs to be taken. For example, the plan might state that a 5% variance in cost requires a status report, while a 10% variance requires a formal change request. Other components include units of measure, levels of precision, and organizational procedure links.
Cost Baseline (Choice A): The cost baseline is the approved version of the time-phased project budget. It is an output of the Determine Budget process, not a component of the Cost Management Plan itself. The plan describes how to develop the baseline, but does not contain it.
Cost Estimates (Choice B): These are the quantitative assessments of the probable costs required to complete project work. They are the output of the Estimate Costs process.
Basis of Estimates (Choice C): This document provides the supporting detail behind the cost estimates (assumptions, constraints, range of possible results). Like the estimates themselves, this is an output of the Estimate Costs process.
By establishing Control Thresholds in the planning phase, the project manager sets clear expectations for when a project ' s financial performance is considered " out of bounds, " allowing for efficient monitoring and controlling throughout the project life cycle.
