Final answer:
The main goal of the cost budgeting process is to create a baseline for project costs and funding requirements. This involves estimating costs through mathematical models and performing cost/benefit analysis to compare marginal costs and benefits of additional units.
Step-by-step explanation:
The main goal of the cost budgeting process is to produce a cost baseline for measuring project performance and project funding requirements. Cost budgeting involves the use of mathematical models to roughly estimate costs for different approaches and to predict the cost of various alternative solutions. These cost estimates are important during the idea generation phase of a project and help establish a connection between the scientific or technical aspects of a project and the financial implications of implementing it, including materials, fabrication, operation, and maintenance costs.
Another important aspect of project financial planning is cost/benefit analysis. It helps in decision-making by comparing the additional costs incurred (marginal costs) against the additional benefits gained (marginal benefits) when adding extra units of a product or service. This analysis is facilitated by using a T-shaped chart where costs are listed on one side and benefits on the other, aiding in weighing the trade-offs between different decision paths.