Question

. How would you recognize the importance of using contingency funds for cost estimation, budgeting and control​

Answer 1

Explanation:

The term ‘Levels of Management’ stands for the arranged managerial positions in an organisation. The number of levels of management increases when the size of the organisation and work force increases. But, it is desirable to restrict the number of levels of management.

Answer 2

It is used to cover any uncertainties in the project and thereby have a control on the project.

• The total cost of a project, is referred to as a cost estimate. It is the estimation of the amount and cost of resources required to finish a project's extent.
• A reserve for cost contingency is added to a base cost estimate to account for cost volatility. It is the approximate cost of the project's total risks.
• In the sense of budgeting, a contingency budget is a sum of money reserved to cover future incidents that are not explicitly planned for in a cost estimate.
• It is often meant to be used during an unanticipated cost extremity requiring cash or liquid assets. It aids in the establishment of a financial plan in the case of an unforeseen event.