According to the PMBOK® Guide, the Cost Baseline is the approved version of the time-phased project budget, excluding any management reserves, which can be changed only through formal change control procedures. It is the primary output of the Determine Budget process.

Process Context: The Determine Budget process aggregates the estimated costs of individual activities or work packages to establish an authorized cost baseline.

Components: The cost baseline includes all authorized budgets but excludes management reserves. Management reserves are intended to cover " unknown unknowns " and are not part of the performance measurement baseline (PMB) but are part of the total project budget.

Usage: It is used as a basis for comparison to actual results to measure and monitor cost performance. In an S-curve graph, the cost baseline represents the cumulative values of the project ' s expected spending over time.

Analysis of other choices:

Choice A (Control Costs): This is a monitoring and controlling process. Its primary outputs include work performance information, cost forecasts, and change requests. It uses the cost baseline as an input to measure variance.

Choice C (Estimate Costs): This process develops an approximation of the monetary resources needed to complete project work. Its primary output is Cost Estimates, which are then used as an input to the Determine Budget process to create the baseline.

Choice D (Estimate Activity Resources): This process identifies the types and quantities of material, human resources, equipment, or supplies required. While this impacts cost, it is a resource management process, not the budget-setting process.