QUESTION 1
Project managers see costs when they are incurred (contracts are executed). Accountants see costs when invoices are received, and Controllers see costs when payments are made.
Project managers: project managers recognize costs after a commitment is made to pay someone for resources or services.
Accountants: accountants recognize an expense when an invoice is received and the cost is actually incurred-not, as most people believe, when the invoice is paid.
Controllers: controllers perceive an expense when the check for the invoice is mailed. Controllers are concerned with managing an organizations cash flow.
This is important to project management because the cost associated with the budget will be recognized and recorded by different parts of the organization at different stages.

QUESTION 2
The three basic causes of budget uncertainty are: 1. Cost estimator errors: Some changes are due to errors the cost estimator made about how to achieve the tasks identified in the project plan. 2. New learning: Other changes result because the project team or client learns more about the nature of the performance goal of the project or the setting in which a product is to be used. 3. Mandated change: Perhaps a new law is passed, a trade association sets a new standard, or a governmental regulatory agency adopts a new policy. These changes alter the previous rules of conduct under which the project had been operating-usually to the detriment of the budget.

QUESTION 3
The most common causes that affect cost estimates are: * Random errors: Errors are random when there is a roughly equal chance that estimates are above or below the true value of a variable and the average size of the error is approximately equal for over-and underestimates. * Systematic errors: If the chance of either over-or underestimates is not about equal or the