Cost Items and Cost Elements


The building block of the cost breakdown structure is the cost item (or task or line item in other terminology). A cost item represents an identifiable achievement or deliverable, such as a piece of work or a particular investment return.


Cost items in turn are made up of one or more cost elements. A cost element is the smallest unit of cost that can be independently described. Examples of cost elements might be a number of labor hours or a subcontract.



Cost Item:                        Testing of new product


Cost Elements:

  1. 100 hours of engineering labor
  2. 200 hours of technician labor
  3. Test equipment purchases
  4. Rental of test facilities


Cost elements are not shown on the cost breakdown structure, but are created as part of a cost item during the data input process. A single cost item can contain up to 256 cost elements


Cost elements may in turn be broken down into sub-elements by defining a cost allocation system.