Contingency costs in the project costs estimate, also referred to as ____, are to cover unexpected situations that may come up during the project, such as items that may have been overlooked when the initial project scope was defined, activities that may have to be redone because they may not work the first time (redesigns), or a high probability or high impact risk that may occur.
A) auxiliary funds
B) withholding
C) reserves
D) capital funds

Question

Quizplus · Accepted Answer

Contingency costs are typically held in reserve to cover unexpected events or risks that may occur during a project. These costs are separate from the initial project estimate and are not to be used unless necessary to prevent project delays or failure. The most common way to account for contingency costs is to set aside a percentage of the overall project budget as a reserve fund. This reserve fund can be drawn upon if needed, but if it is not required by the project's end, it can be released back into the main project budget. Therefore, choice C, reserves, is the most appropriate term to refer to contingency costs in the project costs estimate.

Contingency Costs in the Project Costs Estimate, Also Referred to as ____