I would like to know what is the best way to handle cost adjustment to the baseline in MS project. Do you save the baseline when you adjust the cost when you get new estimate or not?
You should save the baseline when you have an approved plan (that includes schedule, resources and costs). So if a change request is approved you should save the corresponding plan to the baseline.
If you have a new estimate that is not an approved budget Change request, you should track this as a forecast values, in the Cost fields, not in Baseline Cost.