Which of the following costs can be included in a 10% contingency reserve?

Including unforeseen costs in a 10% contingency reserve is appropriate because contingency reserves are specifically designed to account for risks and uncertainties that could arise during a project. These unforeseen costs might include unexpected expenses due to scope changes, delays, or other unforeseen circumstances that cannot be accurately predicted during the planning phase.

Contingency reserves are often established as a percentage of the project budget and serve as a financial buffer, allowing project managers to respond to unplanned events without needing to seek additional funding or disrupt the project. This approach enhances the project’s resilience by ensuring that there are funds readily available to address potential issues, thereby helping to keep the project on track.

In contrast, planned capital expenditures, operational costs, and staff training costs represent expenses that are anticipated as part of the project’s overall financial plan and should be predetermined rather than allocated as part of a contingency reserve. These costs are not uncertainties or risks, but rather part of the baseline budget that has already been estimated and allocated.