What is a cost estimate primarily used for?

A cost estimate is primarily used for compiling costs associated with a project's defined scope. This involves analyzing various factors such as labor, materials, equipment, and overhead to create a comprehensive prediction of what the project will cost. It is crucial for budgeting and financial planning in any project management context, as it helps stakeholders understand the financial implications of their plans and make informed decisions before work begins. By accurately estimating costs, project managers can set realistic budgets, allocate resources effectively, and ensure that they remain within financial constraints throughout the project lifecycle.

While calculating total hours, determining market value, and projecting future revenue are important tasks in their respective contexts, they do not represent the primary purpose of a cost estimate, which focuses specifically on the expected costs of executing a project based on its defined scope.