PM Ch. 10 Test

false

Analogous estimating is the most detailed, time consuming and accurate way to estimate.

true

Regardless of what method is used to estimate project costs, supporting detail should be provided.

true

Value engineering is aimed at increasing the value or productivity of a work element while minimizing the cost.

true

A contingency reserve is money assigned to the project and allocated for identified risks for which contingent responses are developed.

true

A project manager needs to ensure that the cumulative amount of cash coming into the project either from internal budgeting or from customer payments meets or exceeds the demands for paying cash out.

An organization must know details behind the time value of money.

All of the following factors must be in place in order to develop an analogous estimate effectively EXCEPT:

Life cycle cost only includes the project cost from initiating through closing

All of the following items describe an aspect of life cycle costing EXCEPT:

true

Cost estimating is linked very closely with scope, schedule and resource planning.

recurring costs

Costs that repeat as project work continues such as the cost of writing code or laying bricks are appropriately classified as:

true

Fixed costs remain the same regardless of the size or volume of work, while variable costs vary directly with volume of use.

true

Plan Cost Management is the process to determine how to plan, estimate, and control project costs.

executive salaries, utilities and insurance

Projects often include indirect costs that are necessary to keep the organization running, but are not associated with one specific project. Which of the following items are most typically considered to be indirect costs?

cost baseline

The _________is the approved budget, usually in a time distribution format, that is used to estimate, monitor, and control the overall cost performance of the project.

management reserve needs

The documentation of a project cost estimate generally requires substantial supporting detail to include all of these EXCEPT:

false

The project scope does not come into play when considering fixed and variable cost choices.

Variation occurs in all work processes and the novelty associated with most projects creates many opportunities for variation.

There are many causes of variation in project costs. Which of the following accurately describes the nature of this variation?

true

Vendor bid analysis is used to determine whether the price being asked by the vendors appears to be reasonable.

parametric estimating

Which estimating technique uses a statistical relationship between historical data and other variables (e.g., square footage in construction, lines of code in software development) to calculate an estimate for scope, cost and duration?

reserve

Which of the following terms best describes extra money in the project budget to be used if necessary - usually if a risk event occurs?