Cost estimate

A cost estimate is an opinion regarding what a product, project, or program will cost. A cost estimate is based on the best available information on the current date, and so may vary as additional information is obtained over time. There is a range of possible cost estimates. The least accurate cost estimate is the ball park estimate, which is based on a minimal amount of information, supplemented by historical results for similar targets. A budget estimate is assembled without having a complete set of detailed specifications, but is expected to be sufficiently accurate for setting a budgeted funding level within a reasonable range of values. A firm estimate is based on a much more detailed analysis, and can be used within a pricing commitment letter to a customer.