Cost overrun can be incurred due to following factors-

A. Changes in various external factors like inflation and interest rate can also lead to a change in the overall cost of the company leading to cost overrun

B. There has to be improper risk management and improper uncertainty Management due to which there was an increase in the overall cost of the company

C. Error in designing of project can also lead to high degree of cost involved with overall production estimate

D. Cost overrun can also be attributed to estimation errors on the part of the management

E. Cost overrun can also be attributed to labour shortages and time management.

The management of a company should be highly productive in nature in order to estimate with the risk associated with cost overrun and and they should be proactively trying to judge with all such cost with high degree of estimation and they should be trying to eliminate the volatility associated with wrong estimation of these cost so they will be continuously monitoring the cost and synchronising it with actual estimates.