The people actually doing the work estimate the cost involved. If you are using raw time as a metric for estimation, Agile methodologies frown on it. Your team should be using an abstraction to estimate cost, such as 'points'. You can start with a rough baseline of 1 hour per point with a minimum of 1 point. Then developers can make raw estimates of how long something should take. Slap them or anyone else on the wrist if they talk in hours or in any other unit of time.
The point is that as development moves along through multiple sprints, project managers can adjust 'point' time estimates provided by the team to match reality -- This can even be done per individual developer. Participants will become better and better at estimation as projects progress. So, since Sprints are an iterative process, time estimates improve with more iterations.
This begs another question: Why are you worried about time? Time is basically cost in the Waterfall model. In Agile, the goal is developing software to VALUE not cost. The reason points are used is that it is an abstract basis of comparison that business owners, project managers and creators (developers) can all view in an abstract light. (Unbiased from different participants' cultural, social or psychological perceptions of time.) Business owners can take a look at available points in a given sprint -- and knowing the points available -- they can elect functionality that is most important. It is always a bit of a tough decision, but again, the goal is to develop toward value and away from time boxing or feature stuffing.