Question

Briefly explain the differences among budget, cost, and price for a software project.

Answer 1

• budget: The funds or the ,oney that have been allocated for a project. It is not the fixed price it is the total rough estimation of the project. “project budget” refers to a budget that shows how the money given for the project will be spent.

• price: “A value that will purchase a finite quantity, weight, or other measure of a good or service” (Business Dictionary). The price of a purchased unit is determined by the market. it is the market value which had been used up for purchasing the stuffs required for the project.
• cost: “An expenditure, usually of money, for the purchase of goods or services” . Practically , project cost is the one  management cares the  most. the meaning of “cost” varies from industry to industry. For example, in product development, the term has three specific meanings: 1) cost to create the product or project; 2) cost to establish a manufacturing cell capable of producing the product; and 3) cost of the final good or service to the market. The term “project cost” refers to the total sum the project in question will cost the company . The total project cost is calculated by adding up the total costs in the project budget, so the business owners know how much to put aside.