HKSM

The formally approved, time-phased budget for the project that excludes management reserves; it can only be modified through the formal change control process and serves as the benchmark for comparing actual cost performance.

Key Points

• Represents the authorized, time-phased plan for project spending.
• Excludes management reserves but includes contingency reserves.
• Changes are allowed only via formal change control.
• Used as the cost benchmark for tracking and Earned Value analysis.

Example

A $1.2M cost baseline is spread across 12 months. Midway through the project, actual costs run $30K over the plan in month 6. The team compares the variance to the baseline and requests a formally approved change to rephase funds due to supplier delays.

PMP Example Question

Which artifact is the time-phased plan for spending that excludes management reserves and is used to compare actual costs during execution?

1. Cost Management Plan
2. Project Budget
3. Cost Baseline
4. Performance Measurement Baseline

Correct Answer: C — Cost Baseline

Explanation: The cost baseline is the approved, time-phased budget excluding management reserves and is the reference for measuring actual cost performance.