Final answer:
To develop a project budget, include management reserve, contingency reserve, activity-based reserve, and activity cost estimates. The cost baseline represents the approved budget of the project.
Step-by-step explanation:
To develop a project budget, you need to consider several cost elements including the management reserve, contingency reserve, activity-based reserve, and activity cost estimates. The management reserve is a portion of the budget set aside for unforeseen expenses or risks. The contingency reserve is specifically allocated for identified risks. The activity-based reserve is a buffer for specific activities that may incur additional costs. Activity cost estimates involve determining the cost of each activity in the project.
Among these cost elements, the cost baseline represents the approved budget of the project. It is the starting point against which the actual costs of the project are measured. The cost baseline includes the planned costs for all project activities and can be used to track and compare the project's financial performance.