Guide to Cost Aggregation for PMP Exam Based on the PMBOK Guide Seventh Edition

What is Cost Aggregation?
Cost aggregation refers to the process of identifying and summing all the individual costs according to various components of a project, such as activities, work packages, and resources. According to the PMBOK Guide Seventh Edition, cost aggregation is a critical step of cost management that ensures the total estimated cost covers all aspects of the project.

Why is it Important?
Cost aggregation is crucial for cost control and planning. It provides an accurate project budget, helping project managers set realistic cost objectives, monitor and control project costs, and make informed cost-related decisions.

How Does it Work?
Cost Aggregation works by grouping the costs related to specific tasks, deliverables, or phases of a project. Once all the costs are identified, they are aggregated to determine the total project cost.

How to Answer Exam Questions on Cost Aggregation?
When answering questions on cost aggregation, focus on its purpose and functions. Understand the factors influencing cost aggregation, the methods used for it, and how these costs reflect on the project's total spend or budget. It's also crucial to not confuse cost aggregation with cost estimation, which involves predicting the cost of a project until it is completed.

Exam Tips:
To answer questions correctly, familiarize yourself with the concept of 'cost baseline' and its role in project cost management. Understand that cost aggregation takes place throughout the project lifecycle and not just in the planning phase. Recognizing the bottom-up estimation technique, which is commonly used in cost aggregation, can also be useful.