<font color="#e0121d"><b>Costing</b></font><br/><font color="#29313b">An Activity uses ProjectResources to directly or indirectly produce value for the Customer. This may involve production of Products, expansion of infrastructure etc.</font><br/><font color="#29313b">One important requirement is that we need to be able to determine the cost of a ProjectElement (Project, Project Activity, WBS Element) and also of Project Resources.</font><br/><font color="#29313b">This model adopts a parameterized cost model based on Activity Based Costing (ABC) definitions.</font><br/><font color="#29313b">Note that determination of the Activity & ProjectResource parameters is not covered by this model. The parameters should be chosen to give the best indication of cost and other deliverables (e.g. labor requirements). Refer to the [PEI handbook] for details on how to determine these parameters.</font><br/><font color="#29313b">Figure 12 shows the basic ABC concepts and how they relate. The book [Common Cents] provides a good introduction to Activity Based Costing.</font><br/><br/>
