| Course | MT246 Project Planning and Project Execution |
|---|---|
| Unit | Unit 7 |
| Paper type | Cost baseline |
| Length | About 860 words, 6 pages double-spaced |
| Format | APA 7 student paper |
| School | Purdue University Global |
| Program | BS in Business Administration |
| Updated | October 2026 |
Free sample paper for MT246 Unit 7
Three Contingency Rates for Three Kinds of Number: A Unit 7 Cost Baseline for a Food Truck at $166,175
[Student Name]
Purdue University Global
MT246: Project Planning and Project Execution
Unit 7 Cost Baseline
[Instructor Name]
[Date]
Harlan Street Barbecue, its vendors, rates and every figure are composite and illustrative; the sources cited are real.
Purpose
This baseline sets the approved cost of the food truck project, line by line, against the work breakdown structure. It is the figure against which spending will be measured each month. It includes contingency for the known uncertainty in each estimate, but not the owner's management reserve, which covers changes and surprises nobody can name yet. PMI (2021) separates the two in the same way: contingency belongs to the project and is part of the baseline, while the management reserve sits above it and is released only by the sponsor.
The Cost Table
Seventeen lines are listed with their WBS codes, amounts, basis and confidence class.
Firm figures, from signed quotes, agreed prices or published fees:
2.1 Used step van, agreed price: $41,800
2.2 Kitchen upfit, upfitter's quote: $66,900
2.3 Generator and electrical, electrician's quote: $9,150
2.4 Fire suppression system, contractor's quote: $3,850
5.1 Wrap design and install, wrap shop quote: $7,200
3.6 Commercial auto and liability insurance, first year, agent's quote: $4,760
3.1 and 3.2 Health plan review and permit fees, published: $1,040
3.3 and 3.5 Fire inspection and city license fees, published: $650
3.4 Commissary deposit, commissary's letter: $1,200
5.2 Point of sale hardware, vendor quote: $1,580
Estimates, from hourly rates multiplied by estimated hours:
1.x Catering manager, 180 hours at a loaded $34: $6,120
4.2 and 6.3 Pitmaster, 120 hours at $31: $3,720
4.3 Sous chef, 40 hours at $26: $1,040
6.2 New cooks' training, 97 hours at $18: $1,746
Allowances, figures not yet priced in detail:
4.2 Menu testing ingredients: $1,800
4.4 Smallwares and packaging: $2,500
5.3 Launch marketing: $1,500
Class Summary and Contingency
Firm: $138,130, at 5 percent: $6,907
Estimates: $12,626, at 10 percent: $1,263
Allowances: $5,800, at 25 percent: $1,450
Package costs total $156,556. Contingency totals $9,619 after rounding. The cost baseline is $166,175.
Why three rates? A signed quote for the upfit can still move, through change orders or a missed item, but rarely by much; five percent covers that. Hours multiplied by a rate move more, because the hours are estimates; ten percent reflects the planning fallacy the catering manager found in his own first estimate. Allowances are guesses at a total, and smallwares in particular tend to grow once the kitchen is laid out; twenty-five percent is a cautious figure for numbers that have not been itemized. Larson and Gray (2021) recommend matching contingency to the uncertainty of each estimate rather than applying one percentage to the whole budget, because a flat rate over-protects firm quotes and under-protects guesses.
A flat ten percent would have added $15,656, more than half of it on numbers that were already signed.
The Management Reserve
Below a ruled line on the summary sits a management reserve of $6,000, held by the owner. It is not part of the baseline and is not assigned to any package. It exists for changes in scope, such as new equipment the pitmaster may want once the truck is built, and for risks nobody has identified. The authorized budget, baseline plus reserve, is $172,175. Spending from the reserve requires the owner's signature and a change log entry.
What the Baseline Leaves Out
Three kinds of cost are outside the baseline. Operating costs after launch, such as food, fuel, commissary rent and wages for regular service, belong to the truck's operating budget, which begins on July 4. Interest on the owner's bank loan is a financing cost, recorded by the restaurant's accountant rather than the project. And the restaurant's existing equipment that will travel with the truck, two cambros and a slicer, is already owned and carries no new cost. Stating these exclusions keeps the baseline from being blamed later for costs it was never meant to hold.
Should the Van Count?
The used van is the largest single cost and will remain an asset of the business after the project ends. It is counted in the project baseline because the project cannot exist without it and because the owner's bank loan for the project covers it. The restaurant's accountant will treat it as a vehicle asset on the balance sheet; for project control, it is a cost that must be paid on time.
Time-Phased Baseline
Package costs, without contingency, are phased by the month in which each is expected to be paid.
March: $50,604, mainly the van, the upfitter's deposit and plan review fees
April: $41,845, cumulative $92,449, mainly upfit progress payments and the wrap deposit
May: $41,309, cumulative $133,758, the upfit balance, generator, fire suppression and insurance
June: $22,798, cumulative $156,556, the wrap balance, training hours, smallwares and marketing
Fleming and Koppelman (2010) note that a time-phased baseline is what makes earned value possible: without a planned figure for each month, there is nothing to compare progress against. The monthly figures will be used in every status report from April onward.
References
Fleming, Q. W., & Koppelman, J. M. (2010). Earned value project management (4th ed.). Project Management Institute.
Larson, E. W., & Gray, C. F. (2021). Project management: The managerial process (8th ed.). McGraw-Hill.
Project Management Institute. (2021). A guide to the project management body of knowledge (PMBOK guide) (7th ed.). Project Management Institute.
What the MT246 Unit 7 assignment asks for
The seventh unit asks students to build the approved cost of their project, line by line, tied to the work breakdown structure. Each line needs an amount, a basis such as a quote or a rate times hours, and some measure of how certain it is. Contingency should cover the uncertainty in the planned work and is part of the baseline; a management reserve for unknowns and scope changes sits outside it under the sponsor's control. Many sections ask for the baseline phased by month so progress can be measured later. State what the baseline excludes, such as operating costs after launch. Four pages and a spreadsheet printout, with sources in APA 7, is a common format.
Inside the MT246 Unit 7 example
The baseline begins with its purpose and the PMBOK Guide's separation of project contingency from the owner's reserve. The cost table lists ten firm lines, four estimates and three allowances with codes and bases, with a note in the margin on what the three classes allow. A class summary computes contingency at five, ten and twenty-five percent, with Larson and Gray on matching contingency to uncertainty, and the highlighted line shows a flat ten percent would have put more than half its money on signed figures. The reserve section sets the authorized budget at $172,175. Sections on what the baseline leaves out and whether the van counts follow, and monthly phasing with Fleming and Koppelman closes it under a third note.
Where the points sit in the MT246 Unit 7 rubric
Cost baselines earn marks for completeness, a stated basis for every line, a reasoned contingency and a clear separation from the management reserve. Lines tied to the work breakdown structure, with quotes or rates behind them, score higher than round guesses. Graders reward contingency matched to the uncertainty of each kind of estimate over a single percentage applied to everything. Keeping the reserve outside the baseline, with a stated owner, shows understanding of control. A time-phased version by month makes later earned value possible and often carries its own marks. Stating exclusions, consistent arithmetic and accurate citations complete the rubric. One more note on why large assets such as a vehicle are counted, or not, also heads off a question graders often raise.
Common MT246 Unit 7 mistakes, and how to avoid them
The most frequent error is adding ten percent to the total and calling it contingency, which over-protects firm quotes and under-protects guesses. Another is mixing the management reserve into the baseline, so the sponsor loses control of it. Some students leave out internal labor because staff are already paid, which hides the project's real cost. Others forget to phase costs by month. Check that class subtotals add to the package total, and that hours in the estimate class match the hours in your resource plan. Send your work breakdown structure and the quotes you have, and a writer can sort each line by class, set contingency and phase the baseline by month.
Get an MT246 Unit 7 example written to your instructions
Quotes, rates and fee schedules from the case feed every line of this document, together with the breakdown and schedule already built and the Unit 7 prompt and rubric. Send those, and the first baseline returns free within 24-48h, every line classed by how firm it is and the reserve shown in plain sight. The paper above is an original model document written by our desk, not a submitted student paper and not an official Purdue University Global document.
More MT246 papers and BS in Business Administration samples
- MT246 Unit 1: Discussion Board Post
- MT246 Unit 2: Work Breakdown Structure
- MT246 Unit 3: Estimating Exercise
- MT246 Unit 4: Network and Critical Path
- MT246 Unit 5: Project Schedule
- MT246 Unit 6: Seminar Reflection
- MT246 Unit 8: Resource Assignment Plan
- MT246 Unit 9: Status Report
- MT246 Unit 10: Change Request Package
- MT245 Unit 7: Stakeholder Register
- MT243 Unit 7: Activation Plan
- MT242 Unit 7: Program Budget
- MT241 Unit 7: Visualization Exercise
MT246 Unit 7 questions, answered
Is a flat ten percent contingency acceptable?
Some sections accept it, especially on small projects, but a reasoned figure usually earns more. The example ties contingency to how each number was obtained, which yields 6.1 percent here because most costs are signed quotes. A flat figure with no reasoning can look like habit. Where your course teaches a particular sizing method, the sample uses that method instead.
What is the difference between the cost baseline and the authorized budget?
The cost baseline is the time-phased budget the project is measured against, including contingency for known uncertainty. The authorized budget adds the management reserve, held by the sponsor for work nobody has identified. In the example they are 166,175 and 172,175 dollars. Keeping them apart shows what the project manager answers for and what only the owner can release.
Should the used van count as a project cost?
In most course budgets, yes, because the project exists to put that truck into service and buying it is part of the work. Some organizations would treat it as a capital purchase outside the project; if your scenario says so, the line moves to a memo. The example keeps it in, labeled firm, because the purchase price was agreed in writing.
Where can I find a free MT246 Unit 7 sample paper?
This page holds the complete MT246 Unit 7 cost baseline. It prices seventeen food truck lines in three confidence classes, applies a separate contingency rate to each and phases the $166,175 baseline by month.
Why does the MT246 Unit 7 sample use three contingency rates?
Signed quotes rarely move much, hours times rates move more and unpriced allowances move most. A single flat rate would have put most of its money on figures that were already signed.