Project Cost Management Quiz – Himanshu Agarwal

$450,000

$555,556

$500,000

$611,111

2. Which of the following is a key input to the Plan Cost Management process?

Project Charter

Project Management Plan

Stakeholder Register

Risk Register

3. What is the purpose of a cost management plan?

To define the project scope and deliverables.

To outline how the project team will be organized and managed.

To describe how project costs will be planned, structured, and controlled.

To document the project’s high-level information and objectives.

4. What is the formula for calculating the To-Complete Performance Index (TCPI) based on the Estimate at Completion (EAC)?

(BAC – EV) / (EAC – AC)

(EAC – AC) / (BAC – EV)

EAC / EV

EAC / AC

5. Which of the following is a key input to the Control Costs process?

Project Management Plan

Project Charter

Stakeholder Register

Risk Register

6. What is the formula for calculating the Schedule Performance Index (SPI)?

EV / AC

EV / PV

AC / PV

(EV – PV) / PV

7. What is the formula for calculating the Estimate to Complete (ETC) when the cost variance is considered atypical and future performance is expected to be similar to past performance?

BAC – EV

EAC – AC

(BAC – EV) / CPI

BAC / CPI

8. What is the formula for calculating the Estimate to Complete (ETC) when the initial plan is flawed and the CPI is not expected to improve?

BAC – EV

EAC – AC

BAC / CPI

EAC / CPI

9. What is the purpose of reserve analysis in cost management?

To determine the total funding required for the project.

To establish contingency and management reserves.

To track the actual costs incurred on the project.

To forecast the final project cost based on past performance.

10. Which of the following is a tool and technique used in the Determine Budget process?

Reserve Analysis

Earned Value Analysis

Variance Analysis

Trend Analysis

11. What is the formula for calculating the Estimate at Completion (EAC) when future performance is expected to improve?

AC + ETC

BAC / CPI

AC + (BAC – EV) / CPI

BAC – CV

12. Which of the following is a potential output of the Estimate Costs process?

Project Budget

Cost Management Plan

Basis of Estimates

Performance Reports

13. Which of the following is NOT a typical element of the project budget?

Direct Costs

Indirect Costs

Contingency Reserves

Opportunity Costs

14. Which of the following is a key output of the Control Costs process?

Cost Management Plan Updates

Project Schedule Updates

Performance Reports

Risk Register Updates

15. What is the purpose of a Basis of Estimates?

To document how the project budget was developed.

To explain the assumptions and constraints used in cost estimates.

To track the actual costs incurred during the project.

To forecast the final project cost.

16. Which of the following is a key output of the Estimate Costs process?

Budget at Completion (BAC)

Cost Management Plan

Basis of Estimates

Earned Value (EV)

17. A project manager is reviewing the budget for a critical path activity and notices that the actual cost incurred is significantly higher than the planned value. What is the MOST likely immediate concern for the project manager?

The Schedule Performance Index (SPI) will decrease.

The Estimate at Completion (EAC) will likely increase.

The Cost Performance Index (CPI) will improve over time.

The project team is not following the cost management plan.

18. What is the term for the authorized budget assigned to scheduled work?

Actual Cost (AC)

Earned Value (EV)

Planned Value (PV)

Budget at Completion (BAC)

19. What does a Schedule Performance Index (SPI) less than 1 indicate?

The project is ahead of schedule.

The project is behind schedule.

The project is on budget.

The project is over budget.

20. Which of the following is a tool and technique used in the Plan Cost Management process?

Earned Value Analysis

Reserve Analysis

Expert Judgment

Cost Aggregation

21. Which of the following is a benefit of using Earned Value Management (EVM)?

Improved team communication.

Enhanced stakeholder engagement.

Early identification of cost and schedule variances.

More accurate risk assessments.

22. What does a Cost Performance Index (CPI) of 0.8 indicate?

The project is spending 80% of what was budgeted for the work performed.

The project is spending 120% of what was budgeted for the work performed.

The project is 80% complete in terms of cost.

The project is 20% over budget.

23. What is the MOST important factor to consider when developing a cost management plan?

The project budget.

Stakeholder requirements.

The project schedule.

The project team’s experience.

24. Which of the following is a primary responsibility of the project manager in project cost management?

Approving all project expenditures.

Developing the detailed cost estimates.

Ensuring the project is completed within the approved budget.

Negotiating contracts with vendors.

25. Which of the following is a potential consequence of poor project cost management?

Increased team satisfaction.

Improved product quality.

Project failure due to budget overruns.

Enhanced communication with stakeholders.

26. What is the total approved budget established for the project called?

Cost Baseline

Project Budget

Budget at Completion (BAC)

Performance Measurement Baseline

27. What does a Cost Performance Index (CPI) greater than 1 indicate?

The project is over budget.

The project is under budget.

The project is behind schedule.

The project is ahead of schedule.

28. Which of the following is a key input to the Determine Budget process?

Project Charter

Staffing Management Plan

Cost Estimates

Communications Management Plan

29. Which of the following is an example of a direct cost?

Project manager’s salary

Rent for the office space

Travel expenses for team members working on the project

Utilities for the project office

30. A project manager is using a statistical relationship between historical data and project variables to estimate costs. Which estimating technique is being used?

Analogous estimating

Bottom-up estimating

Parametric estimating

Three-point estimating

31. What is the expected range of accuracy for a bottom-up estimate?

-5% to +10%

-10% to +25%

-25% to +75%

-50% to +100%

32. What is the significance of the performance measurement baseline in cost management?

It is the original approved budget against which project performance is measured.

It includes management reserves for unforeseen work.

It is updated regularly to reflect approved scope changes.

It is a high-level estimate used for initial project approval.

33. During a project execution, a stakeholder requests a significant scope change. What should the project manager do FIRST with regard to cost management?

Update the project budget to reflect the change.

Analyze the cost impact of the proposed change.

Inform the stakeholder that the change cannot be accommodated due to budget constraints.

Implement the change immediately and track the new costs.

34. Which of the following is a tool and technique used in the Control Costs process?

Expert Judgment

Funding Limit Reconciliation

Cost Aggregation

Reserve Analysis

35. Which of the following is an example of an indirect cost?

Raw materials used in production

Salaries of project team members directly working on tasks

Corporate overhead allocated to the project

Travel expenses for a consultant working on a specific deliverable

36. What is the total planned value of the work scheduled to be completed by a specific date called?

Earned Value (EV)

Actual Cost (AC)

Budget at Completion (BAC)

Planned Value (PV)

37. What is the process of aggregating the estimated costs of individual work packages or activities to establish an overall cost baseline?

Estimate Costs

Determine Budget

Control Costs

Plan Cost Management

38. What is the formula for calculating the Estimate at Completion (EAC) when the current variances are seen as typical and future performance is expected to be similar?

BAC + (AC – EV)

BAC – CV

AC + (BAC – EV)

BAC / CPI

39. Which of the following is a tool and technique used in the Estimate Costs process?

Cost Aggregation

Reserve Analysis

Analogous Estimating

Budget Updates

40. A project manager is using historical data adjusted for inflation and current market conditions to estimate costs. Which estimating technique is being used?

Analogous estimating

Parametric estimating

Bottom-up estimating

Three-point estimating

41. What is the formula for calculating the three-point estimate using the triangular distribution?

(Optimistic + Pessimistic + Most Likely) / 2

(Optimistic + 4 * Most Likely + Pessimistic) / 6

(Optimistic + Most Likely + Pessimistic) / 3

(Optimistic + 2 * Most Likely + Pessimistic) / 4

42. Which cost estimating technique is generally the most accurate?

Analogous estimating

Parametric estimating

Bottom-up estimating

Three-point estimating

43. Which of the following is a characteristic of sunk costs?

They are future costs that can be avoided.

They are costs that have already been incurred and cannot be recovered.

They are costs that vary with the level of production.

They are fixed costs that remain constant regardless of production levels.

44. A project has a Budget at Completion (BAC) of $750,000. The Estimate at Completion (EAC) is $825,000. What is the Variance at Completion (VAC)?

$75,000

-$75,000

$1,575,000

-$750,000

45. What is the formula for calculating the To-Complete Performance Index (TCPI) based on the Budget at Completion (BAC)?

(BAC – EV) / (BAC – AC)

(BAC – AC) / (BAC – EV)

BAC / EV

BAC / AC

46. A project manager is reviewing the performance reports and notices a consistent negative cost variance. What does this indicate?

The project is ahead of schedule.

The project is spending more than planned.

The project is spending less than planned.

The project is on budget.

47. Which of the following is an example of a variable cost?

Rent for the project office

Salaries of permanent project team members

Cost of raw materials used in production

Insurance premiums for the project

48. What is the expected range of accuracy for an analogous estimate?

-5% to +10%

-10% to +25%

-25% to +75%

-50% to +100%

49. Which of the following is an example of a semi-variable cost?

Monthly internet service with a fixed base fee and usage charges.

Annual insurance premium.

Salary of a project manager.

Cost of raw materials.

50. What is the expected range of accuracy for a budgetary estimate?

-5% to +10%

-10% to +25%

-25% to +75%

-50% to +100%

51. What is the purpose of the To-Complete Performance Index (TCPI)?

To measure the cost efficiency of the work completed to date.

To project the final cost of the project based on current performance.

To indicate the cost performance that must be achieved for the remaining work to meet a specific financial goal.

To track the schedule performance of the project.

52. Which of the following is a potential cause of scope creep and its impact on project costs?

Clearly defined project requirements.

Effective change control processes.

Unapproved changes to the project scope.

Realistic project timelines.

53. What is the primary goal of the Plan Cost Management process?

To create the project budget.

To define how costs will be managed throughout the project.

To monitor and control project spending.

To estimate the resources needed for the project.

54. What is the significance of the Budget at Completion (BAC)?

It is the actual cost incurred on the project to date.

It is the total planned value of the work completed to date.

It is the total planned value of the work.

It is the estimated cost to complete the remaining work.

55. Which of the following is NOT a type of cost typically included in a project budget?

Direct Costs

Indirect Costs

Sunk Costs

Fixed Costs

56. Which of the following is a tool used for forecasting in the Control Costs process?

Variance Analysis

Trend Analysis

Earned Value Analysis

Reserve Analysis

57. Which of the following is a tool used for data representation in the Control Costs process?

Cost Aggregation

Reserve Analysis

S-curves

Funding Limit Reconciliation

58. What is the process of establishing the total budget for the project, including contingency reserves?

Estimate Costs

Plan Cost Management

Determine Budget

Control Costs

59. A project has a Budget at Completion (BAC) of $1,000,000. After 50% of the planned work is completed, the Earned Value (EV) is $450,000 and the Actual Cost (AC) is $550,000. What is the Cost Variance (CV)?

$100,000

-$100,000

$50,000

-$50,000

60. What is the purpose of funding limit reconciliation?

To allocate budget to different work packages.

To ensure that expenditures align with funding availability.

To track the actual spending against the planned budget.

To forecast the final cost of the project.

61. Which cost management technique involves comparing actual project performance to planned performance and taking corrective action when necessary?

Cost Budgeting

Cost Estimating

Earned Value Management

Resource Planning

62. What is the purpose of trend analysis in project cost management?

To compare planned costs with actual costs at a specific point in time.

To forecast future cost performance based on past trends.

To determine the root causes of cost variances.

To allocate contingency reserves to project activities.

63. Which cost management tool helps to visualize and track the project’s cost performance over time, allowing for the identification of trends and potential future deviations?

Cost Management Plan

Earned Value Analysis

Funding Limit Reconciliation

Reserve Analysis

64. Which of the following is a tool used for data analysis in the Control Costs process?

Expert Judgment

Meetings

Trend Analysis

Cost Management Plan

65. Which of the following is NOT a typical input to the Estimate Costs process?

Scope Baseline

Project Schedule

Resource Calendars

Stakeholder Register

66. What does a Schedule Performance Index (SPI) of 1.1 indicate?

The project is 10% behind schedule.

The project is 10% ahead of schedule.

The project is on schedule.

The project is 110% over budget.

67. Which of the following is a primary goal of project cost management?

To maximize the project team’s efficiency.

To ensure the project is completed on time.

To complete the project within the approved budget.

To meet all stakeholder expectations.

68. Which of the following is a potential cause of cost overruns on a project?

Accurate initial cost estimates.

Effective change control processes.

Unforeseen risks and issues.

Proactive risk management.

69. Which cost estimating technique involves estimating the cost of individual work packages and then summing them to get a total project cost?

Analogous estimating

Parametric estimating

Bottom-up estimating

Three-point estimating

70. A project has a Budget at Completion (BAC) of $2,000,000. The Earned Value (EV) is $1,200,000 and the Actual Cost (AC) is $1,500,000. What is the Cost Performance Index (CPI)?

0.8

1.25

0.6

1.67

71. Which of the following formulas is used to calculate the Cost Performance Index (CPI)?

EV / PV

EV / AC

AC / PV

(EV – AC) / EV

72. A project has a planned value (PV) of $800, an earned value (EV) of $700, and an actual cost (AC) of $750. What is the Schedule Variance (SV)?

$50

-$50

$100

-$100

73. What is the expected range of accuracy for a three-point estimate?

It depends on the weighting of the optimistic, pessimistic, and most likely estimates.

-5% to +10%

-25% to +75%

-50% to +100%

74. A project manager is asked to provide a cost estimate quickly based on historical data from similar projects. Which estimating technique is MOST likely being used?

Bottom-up estimating

Parametric estimating

Analogous estimating

Three-point estimating

75. What is the purpose of variance analysis in project cost management?

To identify the root causes of cost deviations.

To develop the initial project budget.

To track the actual costs incurred.

To forecast the final project cost.

76. What is the expected range of accuracy for a definitive estimate?

-5% to +10%

-10% to +25%

-25% to +75%

-50% to +100%

77. Which of the following tools and techniques is used in the Plan Cost Management process?

Earned Value Analysis

Funding Limit Reconciliation

Expert Judgment

Variance Analysis

78. Which of the following is NOT a characteristic of a well-defined cost baseline?

It is time-phased.

It includes contingency reserves.

It is used for monitoring and controlling project costs.

It is established early in the project lifecycle.

79. Which of the following is a tool and technique used in the Determine Budget process?

Earned Value Analysis

Trend Analysis

Cost Aggregation

Variance Analysis

80. Which of the following is a tool and technique used in the Estimate Costs process?

Cost Aggregation

Funding Limit Reconciliation

Reserve Analysis

Vendor Bid Analysis

81. Which of the following is NOT a typical element of a cost management plan?

Units of measure

Levels of precision

Rules for performance measurement

Project schedule network diagram

82. What is a contingency reserve typically used for in project cost management?

To cover known risks that are included in the project scope and budget.

To cover unforeseen risks or scope changes that may occur during the project.

To manage the profit margin of the project.

To allocate funds for future projects.

83. What is the purpose of funding limit reconciliation?

To ensure that the planned expenditures do not exceed the funding commitments.

To allocate contingency reserves to specific project activities.

To track the actual spending against the budget.

To forecast the final project cost.

84. Which of the following is a key input to the Estimate Costs process?

Project Budget

Risk Register

Performance Reports

Stakeholder Register

85. What is the difference between a rough order of magnitude (ROM) estimate and a definitive estimate?

A ROM estimate is more accurate than a definitive estimate.

A definitive estimate is typically developed earlier in the project lifecycle than a ROM estimate.

A ROM estimate has a wider range of potential values than a definitive estimate.

A definitive estimate is used for strategic decision-making, while a ROM estimate is used for detailed planning.

86. What is the purpose of management reserves in project cost management?

To cover known risks identified during planning.

To cover unforeseen work within the project scope.

To cover scope changes that are approved by the change control board.

To cover unknown risks and unforeseen work outside the original scope.

87. What is the difference between contingency reserves and management reserves?

Contingency reserves are for known risks, while management reserves are for unknown risks.

Management reserves are part of the performance measurement baseline, while contingency reserves are not.

Contingency reserves are controlled by the project manager, while management reserves require management approval.

There is no significant difference between the two; they are interchangeable terms.

88. Which of the following is NOT a typical input to the Determine Budget process?

Basis of Estimates

Scope Baseline

Project Schedule

Performance Reports

89. Which of the following is a primary input to the Control Costs process?

Project Scope Statement

Risk Management Plan

Work Performance Data

Stakeholder Management Plan

90. A project has a planned value (PV) of $500, an earned value (EV) of $450, and an actual cost (AC) of $550. What is the cost variance (CV) for this project?

$100

-$100

$50

-$50

91. Which of the following is a characteristic of fixed costs?

They change in proportion to the level of production.

They remain constant regardless of the level of production.

They are directly attributable to specific project activities.

They are incurred only when the project is behind schedule.

92. Which of the following is NOT a typical type of reserve used in project cost management?

Contingency Reserve

Management Reserve

Schedule Reserve

Budget Reserve

93. What is the formula for calculating the variance at completion (VAC)?

BAC – EAC

EV – AC

PV – AC

BAC – PV

94. Which of the following is a characteristic of parametric estimating?

It uses historical data from similar projects.

It involves a detailed, bottom-up approach.

It uses statistical relationships between variables.

It considers optimistic, pessimistic, and most likely scenarios.

95. Which of the following is a key output of the Determine Budget process?

Cost Estimates

Cost Management Plan

Cost Baseline

Performance Reports

96. A project manager is reviewing a cost report that shows a significant negative Cost Variance (CV). What should be the NEXT step?

Immediately cut project spending.

Re-baseline the project budget.

Investigate the reasons for the variance.

Report the variance to the stakeholders.

97. Which of the following is a key benefit of effective project cost management?

Increased team morale

Improved stakeholder satisfaction

Reduced project risks

Enhanced communication

98. What is the primary purpose of the Control Costs process?

To define how the project costs will be estimated, budgeted, managed, monitored, and controlled.

To develop an approximation of the monetary resources needed to complete project activities.

To monitor the status of the project budget, manage changes to the cost baseline, and inform stakeholders of authorized changes to the project costs.

To establish the total budget for the project, which includes contingency reserves.

99. What is the purpose of the Cost Management Plan?

To define the project’s objectives and deliverables.

To outline the processes for planning, managing, and controlling project costs.

To document the project’s schedule and resource requirements.

To describe how stakeholders will be engaged throughout the project.

100. Which of the following is a potential output of the Control Costs process?

Project Schedule

Quality Reports

Budget Forecasts

Risk Management Plan

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