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Chapter 6: Project Budgeting & Costing

Covers budgeting principles, costing methods, and preparation of detailed project budgets.
This chapter is part of the Part II – Planning Tools & Techniques block of the Projects6.com PPM textbook, designed for Year 2 students and practitioners.

Chapter 6 Part II – Planning Tools & Techniques Year 2

Key topics

  • Cost categories and budget lines
  • Input costing and unit costs
  • Multi-year budgeting
  • Budgets for donor-funded projects
Budget Costing Finance Donor Unit cost
Learning outcomes
  • Prepare a basic project budget using unit costs and quantities.
  • Explain the importance of realistic budgeting and cost control.

You can link this chapter to mock exams in PPM exams and templates in PPM templates for practice.

Overview

This chapter introduces the core ideas of Project Budgeting & Costing. It provides a bridge between theory and practice for students and practitioners working in universities, NGOs, CBOs, PDM parishes and government projects.

By the end of the chapter, you should be able to connect these concepts to real-life projects in Uganda, East Africa and beyond. Use the tabs above to explore explanatory content, practical examples and guided exercises.

For a complete course structure, visit the textbook overview and courses list.

Explanatory Content (Skeleton)

Here you will later insert the full chapter content – sections, sub-sections, tables, figures and diagrams. For now, this is a structured skeleton to guide your writing.

1. Introduction

Introduce the main ideas of this chapter and show how they connect to previous chapters and to real projects in Uganda or Africa.

2. Key Concepts

  • Define the most important terms used in this chapter.
  • Explain any new models, frameworks or diagrams.
  • Highlight any assumptions / limitations.

3. Step-by-step Explanation

Break the topic into clear steps or elements. For example:

  • Step 1 – identify the problem or situation.
  • Step 2 – apply the tool or method (e.g. problem tree, logframe, WBS).
  • Step 3 – interpret and use the results in project planning and management.

4. Link to Other Chapters

Show how this chapter connects to earlier or later chapters, especially those on planning tools, budgeting, risk, MEL and impact evaluation.

Practical Example

Use this section to insert a worked example based on a realistic project.

Example – Community Water Project (Skeleton)
Imagine a parish in Kyotera District facing serious water shortages. Using the concepts from this chapter, demonstrate how to:
  • Describe the situation using the key concepts in this chapter.
  • Apply the relevant tool (e.g. problem tree, logframe, WBS, risk matrix, etc.).
  • Interpret the results to improve project planning and management.

Later you can replace this with a KWOF project, a government programme or another real case such as a cassava processing or biogas project.

Exercises & Reflection

Add 3–10 short exercises and reflection questions (each chapter in your textbook can have more later – e.g. 12–21 exercises with solutions at the back).

Exercise 1
Using an organisation you know (university, NGO, CBO, parish), apply one key tool from this chapter. Summarise your findings in 1–2 pages.
Exercise 2
In a small group, discuss how the concepts in this chapter can improve the design of the Parish Development Model (PDM) projects in your area.
Reflection Question
What is one thing in this chapter that changed how you think about projects? Write a short personal reflection (½ page).

Projects6.com • PPM Textbook — each chapter connects to real projects, templates and mock exams to build strong project planning and management skills.