Cost Budgeting involves summing the estimated costs of the work activities at the work package level or higher, depending on the needs of the project and the policies of the performing organization.

If bottom-up estimation was used to estimate activity costs, a time-phased budget at the activity level can be produced by allocating the activities' costs to the time periods in which the project schedule says the activities will take place.

Rolling activity costs up to the work package level is then straightforward.

Baseline Spend Curve

The baseline S-curve shows the total planned cumulative expenditure, period by period throughout the duration of the project.

At the planned end date of the project, the cumulative cost reaches the full budget amount, known as budget at completion (BAC).

In the simplified example below, a project consisting of 6 tasks is shown. Tasks are labeled A through F, and each is associated with a cost.

The network diagram at the bottom illustrates the dependencies among the tasks.

• At the end of time period 1, task A has completed, so the cost expended after period 1 is $10.
• At the end of time period 2, tasks B and C have also completed, so the cost expended after period 2 is ($10 + $25 + $20) = $55.
• At the end of period 3, tasks D and E have also completed, so the cost expended after period 3 is ($55 + $15 + $45) = $115.
• At the end of period 4, task F has completed, so the cost expended after period 4, the end of the project, is ($115 + $25) = $140.