Chapter 7 PMBOK 5th edition - Practice Test #5
The ERP project has a current schedule performance index (SPI) of 1.5. This means: A The project has a cost underrun. B More work was completed than planned. C The project has a cost overrun. D Less work was completed than planned.
A schedule performance index (SPI) greater than 1.0 indicates that more work was completed than was planned (Choice B). PMBOK® 7.4.2.1, pg 219
All of the following are tools or techniques for Control Costs EXCEPT: A Funding limit reconciliation. B To-complete performance index. C Earned value management. D Performance reviews.
Funding limit reconciliation (Choice A) is a tool or technique used with the Determine Budget process. PMBOK® 7, pg 194
Which of the following statements is TRUE? A Organizations should fund 100% of the project budget at initiation. B Funding usually occurs at the end of the project. C Funding usually occurs in incremental amounts during the life of the project. D Management reserves are the responsibility of the project manager.
Funding often occurs in incremental amounts during the life of the project, resulting in a stepped curve. PMBOK® 7.3.3.2, pg 214
Which of the following is a tool and technique of Control Costs? A Forecasting B Change requests C Value management D Organizational process assets updates
Change requests (Choice B) and organizational process assets updates (Choice D) are outputs of Control Costs. EARNED value management is a PMBOK® term, but value management (Choice C) is not. Forecasting (Choice A) is a tool and technique for the Control Costs process. PMBOK® 7.4, pg 215
__________ is the measure of work performed expressed in terms of the budget authorized for that work. It is the budget associated with the authorized work that has been completed. A Earned value (EV) B Actual cost (AC) C Budget value (BV) D Planned value (PV)
Choice A, earned value (EV), is the measure of work performed expressed in terms of the budget authorized for that work. PMBOK® 7.4.2.1, pg 218
You are a project manager working through the Determine Budget process. Your scope statement provides for a budget of $75,000, but it was prepared last year prior to your detailed analysis. You have now completed the Determine Budget process and determined that the project will cost around $68,000. All of the following outputs will have been impacted by your analysis EXCEPT: A Cost baseline. B Project documents updates. C Project funding requirements. D Cost forecasts.
Choices A, B and C are all outputs of the Determine Budget process and will be results of your analyses. Cost forecasts (Choice D) is an output of the Control Costs process, and you are not there yet. PMBOK® 7, pg 194
__________ may be included in cost estimates to account for cost uncertainty. A Contingency reserves B Parametric estimates C Analogous estimates D Slush funds
Cost estimates may include contingency reserves (Choice A) to account for cost uncertainty. The contingency reserve may be a percentage of the estimated cost, a fixed number, or may be developed by using quantitative analysis methods. PMBOK® 7.2.2.6, pg 206
Triangular distribution and beta distribution are two formulas used with : A Parametric estimating. B Analogous estimating. C Three-point estimates. D Bottom-up estimating.
Depending on the assumed distribution of values within the range of the three estimates (Choice C), the expected cost, cE, can be calculated using a formula. Two commonly used formulas are triangular and beta distributions. PMBOK® 7.2.2.5, pg 206
EV - PV is the formula for: A Cost performance index (CPI). B Cost variance (CV). C Schedule variance (SV). D Schedule performance index (SPI).
SV = EV - PV. PMBOK® 7.4.2.4, pg 224
Which estimating technique uses a statistical relationship between historical data and other variables? A Analogous Estimating B Bottom-up estimating C Parametric estimating D Statistical estimating
'Parametric estimating (Choice C) uses a statistical relationship between historical data and other variables. An example of a variable in the construction field is square footage; in software development, lines of code. PMBOK® 7.2.2.3, pg 205
Which of the following terms is NOT associated with Control Costs? A Performance measurements B Project management plan updates C Parametric estimating D Cost forecasts
Choices A (performance review includes performance measurements), B and D are either inputs or outputs in the Control Costs process. Choice C is a technique used with the Estimate Costs process. PMBOK® 7, pg 194
ACME company has had several recent projects with cost overruns due to low estimates. As a result, the company realized a net loss in the last fiscal year and the CEO has mandated that the best possible cost estimating methods be used on new projects going forward. Carol, a project manager, is starting a new project at ACME. Which cost estimating method should she use? A Parametric estimating B Three-point estimates C Bottom-up estimating D Analogous estimating
Although bottom-up estimating may provide accurate estimates (Choice C), it is single point estimating, and will be influenced by size and complexity of the individual activity and work packages. In this question, Carol needs to be sure to also include risk in her estimates in order to meet the CEO's mandate. The accuracy of single-point activity cost estimates may be improved by considering estimation uncertainty and risk and using three estimates (Choice B) to define an approximate range for an activitys cost. PMBOK® 7.2.2.5, pgs 205-206
You work at a company where projects tend to be very similar and the staff generally has the expertise to develop accurate estimates. What estimating technique will you most likely use? A Bottom-up estimating B Analogous estimating C Baseline-plus estimating D Parametric estimating
Analogous estimating (Choice B) is most reliable when the previous projects are similar in fact and not just in appearance, and the project team members have the expertise to develop accurate estimates. PMBOK® 7.2.2.2, pg 205
__________ means using the actual cost of previous, similar projects as the basis for estimating the cost of the current project. A Bottom-up estimating B Parametric estimating C Analogous estimating D Vendor bid analysis
Analogous estimating (Choice C) uses the values of parameters, such as cost, budget, and duration or measures of scale such as size, weight, and complexity, from a previous, similar project as the basis for estimating the same parameter or measurement for a current project. PMBOK® 7.2.2.2, pg 204
Which estimating technique is generally less costly than other estimating techniques but also generally less accurate? A Bottom-up estimating B Parametric estimating C Resource rate estimating D Analogous estimating
Analogous estimating (Choice D) is generally less costly and time consuming than other estimating techniques, but it is also generally less accurate. PMBOK® 7.2.2.2, pg 205
The procedures by which the cost baseline can be changed are defined by the: A Project charter. B Project work plan. C Risk management log. D Perform Integrated Change Control process.
Analysis of project performance can result in a change request to the cost baseline or other components of the project management plan. Change requests are processed for review and disposition through the Perform Integrated Change Control process. PMBOK® 7.4.3.3, pg 225
Which of the following is NOT an output of Determine Budget? A Project documents updates B Project funding requirements C Basis of estimates D Cost baseline
Basis of estimates (Choice C) is an input to Determine Budget. PMBOK® 7, pg 194
__________ is a method used to decompose a component of work into more detail. The accuracy of this method of estimating is driven by the size and complexity of the work identified at the lower levels. A Bottom-up estimating B Parametric estimating C Low level estimating D Project management software
Bottom-up estimating (Choice A) is a method of estimating a component of work. The cost of individual work packages or activities is estimated with the greatest level of specified detail, and the cost is then summarized or "rolled up" to higher levels for subsequent reporting and tracking purposes. PMBOK® 7.2.2.4, pg 205
EV/AC is the formula for: A Cost performance index (CPI). B Schedule variance (SV). C Cost variance (CV). D Schedule performance index (SPI).
CPI = EV/AC. PMBOK® 7.4.2.4, pg 224
If earned value (EV) = $16 and cost variance (CV) = -$10, what is the cost performance index (CPI)? A 1.625 B 0.76 C 0.62 D 1.31
CV = EV - AC. Applying simple arithmetic, the equation becomes AC = EV - CV. Solve for AC using the information given: AC = 16 minus (-10), or 26. CPI = EV/AC. Solve for CPI using the information given: CPI = 16/26, or 0.62. A CPI value less than 1.0 indicates a cost overrun of the estimates. PMBOK® 7.4.2.1 pg 218 and 7.4.2.4, pg 224
If earned value (EV) = $36, and cost variance (CV) = $10, what is the actual cost (AC)? A $46 B ($5) C $26 D $5
CV = EV - AC. Using the information given, $10 = $36 - AC, so AC equals $26. PMBOK® 7.4.2.1 pg 218
If your work so far has cost $26, and your deliverable is currently worth $16, what should you report as cost variance? A ($10) B $5 C $10 D ($5)
CV = EV - AC. Using the information given, CV = $16 - $26, so CV equals -$10. PMBOK® 7.4.2.1 pg 218
An __________ is the expected total cost of completing all work expressed as the sum of the actual cost to date and the estimate to complete. A Estimate at completion (EAC) B Estimate to complete (ETC) C Actual cost (AC) D Earned value (EV)
Choice A, an estimate at completion (EAC), is the expected total cost of completing all work expressed as the sum of the actual cost to date and the estimate to complete. PMBOK® 7.4.2.4, pg 224
Which of the following can be converted to efficiency indicators to reflect performance of any project? A Cost variance (CV) and budget at completion (BAC) B Cost variance (CV) and cost performance index (CPI) C Actual cost (AC), earned value (EV)and planned value (PV) D Cost variance (CV) and actual cost (AC)
Choice B cannot be correct because CPI IS an efficiency indicator. Efficiency indicators are CPI and SPI. The SV and CV values (and their component parts, e.g., EV, AC, PV) can be converted to efficiency indicators to reflect the cost and schedule performance of any project for comparison against all other projects or within a portfolio of projects. PMBOK® 7.4.2.1, pg 219
__________ is the realized cost incurred for the work performed on an activity during a specific time period. A Planned value (PV) B Actual cost (AC) C Cost variance (CV) D Earned value (EV)
Choice B, actual cost (AC), is the realized cost incurred for the work performed on an activity during a specific time period. It is the total cost incurred in accomplishing the work that the EV measured. PMBOK® 7.4.2.1, pg 218
__________ is the expected cost needed to complete all the remaining work. A Budget value (BV) B Estimate to complete (ETC) C Planned value (PV) D Estimate at completion (EAC)
Choice B, estimate to complete (ETC), is the expected cost needed to complete all the remaining work. PMBOK® 7.4.2.4, pg 224
The human resource management plan: A Is completed before the project management plan. B Shows the connections between work that needs to be done and project team members. It can show responsibilities at various levels of detail. C Has staffing attributes and personnel rates. These are needed to develop project cost estimates. D Is developed at the activity level and used to closely link project roles and responsibilities to schedule activities.
Choice C is the correct answer. The human resource management plan has staffing attributes, personnel rates, and related rewards/recognitions, which are necessary components for developing the project cost estimates. PMBOK® 7.2.1.2, pg 202
__________ equals earned value (EV) minus actual cost (AC). A Actual cost (AC) B Planned value (PV) C Cost variance (CV) D Schedule variance (SV)
Choice C, cost variance (CV), is the amount of budget deficit or surplus at a given point in time, expressed as the difference between earned value and the actual cost. It is a measure of cost performance on a project. It is equal to the earned value (EV) minus the actual cost (AC). PMBOK® 7.4.2.1, pg 218
__________ is the authorized budget assigned to the work to be accomplished for an activity or a work breakdown structure component. A Earned value (EV) B Actual cost (AC) C Cost variance (CV) D Planned value (PV)
Choice D, planned value (PV), is the authorized budget planned for the work to be accomplished for an activity or a work breakdown structure component, not including management reserve. PMBOK® 7.4.2.1, pg 218
You are starting the process necessary for developing an approximation of the costs of the resources needed to complete your project activities. Your boss tells you to check relevant published labor rates for some of your proposed team members. Where will you find this information? A Requested changes B Scope baseline C Cost baseline D Enterprise environmental factors
Choices A, B and C have no bearing on published labor rates. The correct answer is Choice D: resource cost rate information is often available from commercial databases, which is an enterprise environmental factor. PMBOK® 7.2.1.6, pg 204
Which of the following is NOT an Estimate Costs technique? A Vendor bid analysis B Parametric estimating C Bottom-up estimating D Alternative analysis
Choices A, B, and C are tools and techniques for Estimate Costs (PMBOK® 7.2.2, pgs 204-207). Alternative analysis (Choice D) is a tool and techniques for the Estimate Activity Resources process. PMBOK® 6.4.2, pg 164
All of the following should be included in the detail supporting the cost estimate EXCEPT: A Indication of the range of possible estimates. B Exclusions. C Documentation of how the estimate was developed. D Known constraints.
Choices A, C and D are all examples of the type of additional detail that should be included in supporting documentation (basis of estimates). Regardless of the level of detail, the supporting documentation should provide a clear and complete understanding of how the cost estimate was derived. Exclusions (Choice B) is not part of the Estimate Costs process, and is therefore the correct answer. PMBOK® 7.2.3.2, pg 208
Allowances for unplanned but potentially required changes that can result from realized risks identified in the risk register is called: A A slush fund. B Contingency reserves. C Escrows. D Management reserves.
Contingency reserves (Choice B) are allocated for identified risks, which are accepted and for which contingent or mitigating responses are developed. Contingency reserves are often viewed as the part of the budget intended to address the known-unknowns that can affect a project. PMBOK® 7.2.2.6, pg 206
Project cost control seeks out causes of positive and negative variances and is part of which process? A Variance analysis B Control costs C Develop Project Management Plan D Direct and Manage Project Work
Control Costs (Choice B) is the process of monitoring the status of the project to update the project costs and managing changes to the cost baseline. The key benefit of this process is that it provides the means to recognize variance from the plan in order to take corrective action and minimize risk. PMBOK® 7.4, pg 215
Project cost control searches out causes of __________ variances. A Positive B Positive and negative C Negative D Earned value (EV)
Control Costs is the process of monitoring the status of the project to update the project costs and managing changes to the cost baseline. The key benefit of this process is that it provides the means to recognize variance (positive or negative) from the plan in order to take corrective action and minimize risk. PMBOK® 7.4, pg 215
Which of the following is NOT an output of Estimate Costs? A Project documents updates B Basis of estimates C Activity cost estimates D Cost baseline
Cost baseline (Choice D) is an output of Determine Budget. PMBOK® 7, pg 194
Cost estimates are aggregated by work packages in accordance with the __________. A Cost management plan B Project staffing plan C Risk breakdown structure D Work breakdown structure
Cost estimates are aggregated by work packages in accordance with the work breakdown structure (Choice D). PMBOK® 7.3.2.1, pg 211
Scott completes his earned value calculations and publishes a new EAC value. What Control Costs output has he produced? A Work estimate information B Cost baseline C Project management plan D Cost forecasts
Cost forecasts (Choice D) is an output of Control Costs, and can either be a calculated EAC value or a bottom-up EAC value. PMBOK® 7.4.3.2, pg 225
Earned value management (EVM) develops and monitors three key dimensions for each work package and control account. Which of the following is NOT one of the dimensions? A Actual cost B Earned value C Planned cost D Planned value
EVM develops and monitors three key dimensions for each work package and control account: planned value (Choice D), earned value (Choice B) and actual cost (Choice A). Planned cost (Choice C) is not considered a key dimension. PMBOK® 7.4.2.1, pgs 217-218
Abigail, the project manager for the construction of a new hospital, is uncertain which project cost estimating method is the most appropriate to use. She finds that there are multiple options, and sometimes they are complementary or even contradictory. For her situation, she will have to use: A Cost of quality. B Bottom-up estimating. C Expert judgment. D Analogous estimating.
Expert judgment (Choice C) can be used to determine whether to combine methods of estimating and how to reconcile differences between them. PMBOK® 7.2.2.1, pg 204
All of the following are an important part of Control Costs EXCEPT: A Isolate and understand variance from the approved cost baseline. B Determining who to blame for a variance. C Managing the actual changes as they occur. D Informing stakeholders of all approved changes and associated costs.
Important aspects of cost control include influencing factors that create changes to the cost baseline, ensuring change requests are processed in timely manner, managing changes in real time (Choice C), monitoring cost expenditures, understanding variance (Choice A), monitoring work performance, and informing stakeholders of cost of changes (Choice D). Focusing on blame (Choice B) for a variance or anything else for that matter, is not one of the important parts of any process. PMBOK® 7.4, pgs 216
Which estimating technique involves estimating the cost of individual work packages with the greatest level of specific detail? A Analogous Estimating B Parametric Estimating C Micro Estimating D Bottom-up Estimating
Micro estimating (Choice C) is not a PMBOK® term. Bottom-up estimating (Choice D) involves estimating the cost of individual work packages with the greatest level of specified detail. PMBOK® 7.2.2.4, pg 205
A cost management plan may contain: A Control thresholds, reporting formats, and units of measure. B Level of accuracy, organizational procedure links, and cost forecasts. C Rules of performance measurement, control thresholds, and reserve analysis. D Units of measure, process descriptions, and activity cost estimates.
Notice that Choices B, C and D contain results rather than processes. The cost management plan can establish units of measure, level of precision, level of accuracy, organizational procedures links, control thresholds, rules of performance measurement, reporting formats, and process descriptions. Choice A is the correct answer. PMBOK® 7.1.3.1, pgs 199-200
Cost estimating policies, cost estimating templates, and lessons learned are examples of __________ which are an input to the Estimate Costs process. A Cost standards B Organizational process assets C Reserve analyses D Vendor bid analyses
Organizational process assets (Choice B) include cost estimating policies, cost estimating templates, historical information, and lessons learned. PMBOK® 7.2.1.7, pg 204
Simon has been a project manager at for Dandy Burger for 10 years. He has just completed the construction of Dandy Burger location #1,007. All locations are the same size and based on the same construction plans. He is starting estimating for the construction at another location, which will be the 38th location where he has personally managed the construction. This location, however, will be a Super Dandy Burger and will be twice the size of the other locations. Simon knows the industry standard relationship between square feet and costs. The estimating method he should use is: A Parametric estimating. B Analogous estimating. C Project management estimating software. D Bottom-up estimating.
Parametric estimating (Choice A) uses a statistical relationship between historical data and other variables. An example of a variable in the construction field is square footage; in software development, lines of code. PMBOK® 7.2.2.3, pg 205
__________ is a technique that uses a statistical relationship between historical data and other variables to calculate a cost estimate activity parameter, such as cost, budget and duration. A Bottom-up estimating B Parametric estimating C Statistical estimating D Top-down estimating
Parametric estimating (Choice B) uses a statistical relationship between historical data and other variables to calculate a cost estimate for project work. PMBOK® 7.2.2.3, pg 205
In the earned value management (EVM) technique, the total of the planned value (PV) is sometimes referred to as: A Cost performance index (CPI). B Cost variance (CV). C Schedule variance (SV). D Performance measurement baseline (PMB).
Planned value (PV) is the authorized budget assigned to scheduled work. It is the authorized budget planned for the work to be accomplished for an activity or work breakdown structure component, not including management reserve. This budget is allocated by phase over the life of the project, but at a given moment, planned value defines the physical work that should have been accomplished. The total of the PV is sometimes referred to as the performance measurement baseline (PMB). The total planned value for the project is also known as budget at completion (BAC). PMBOK® 7.4.2.1, pg 218
All of the following are outputs of Control Costs EXCEPT: A Change requests. B Cost forecasts. C Work performance information D Project funding requirements.
Project funding requirements is an output of Determine Budget. PMBOK® 7, pg 194
Joe presents the following information for his project: SPI = 1.05, CPI = 0.95. You are the project sponsor. What do you tell management about these results? A The project is behind schedule and over budget. B The project is ahead of schedule and under budget. C The project is over budget and ahead of schedule. D The project is behind schedule, and on budget.
SPI = EV/PV, so an SPI of 1.05 indicates more earned value than planned value. This means the project is ahead of schedule. CPI = EV/AC, so CPI of 0.95 indicates less earned value than actual cost. This means the project is over budget. PMBOK® 7.4.2.4, pg 224
You are 6 months into a 9 month project and need to evaluate your progress. At this point in the project, you had expected to have built $21,000 worth of product. If you find that your team has spent $15,000 to build $16,000 worth of product, what is the schedule performance index (SPI)? A 0.62 B 1.625 C 1.31 D 0.76
SPI = EV/PV. Using the information given, SPI = $16,000/$21,000, or 0.76. PMBOK® 7.4.2.1 pg 219
If planned value = $18, and there is an unfavorable schedule variance of $2, what is the earned value (EV)? A $5 B $26 C $21 D $16
SV = EV - PV. An unfavorable variance is less than one. Using the information given, -$2 = EV - $18, so EV equals $16. PMBOK® 7.4.2.1 pg 218
If EV = $15 and PV = $20, what is the schedule variance (SV)? A $35 B ($5) C ($10) D $5
SV = EV - PV. Using the information given, SV = $15 minus $20, so SV equals -$5. PMBOK® 7.4.2.1 pg 218
A planned one year project at ACME company has been in progress for 6 months. The project sponsor has requested that the project manager provide the value of the schedule variance. The project manager knows that the planned value is $500,000 and that the earned value is currently $250,000. The schedule variance is __________. A 0.5 B $750,000 C $250,000 D ($250,000)
Schedule variance (SV) equals earned value (EV) minus planned value (PV). SV = $250,000 - $500,000, or negative $250,000. PMBOK® 7.4.2.1, pg 218
Scope baseline is an input to the Determine Budget process. What is included in the scope baseline? A Scope statement, work breakdown structure and WBS dictionary B Scope baseline is actually an input to the Define Scope process C Requirements, WBS and WBS dictionary D Cost forecasts
Scope statement, work breakdown structure and WBS dictionary are all components of the scope baseline. PMBOK® 7.3.1.2, pg 210
Monitoring of the status of the project to update the project cost and managing changes to the cost baseline is the definition for: A Budget control. B Variance control. C Control Costs. D Change control.
The Control Costs (Choice C) process is defined as the monitoring of the status of the project to update the project costs and managing changes to the cost baseline. PMBOK® 7, pg 193
Aggregating the estimated costs of individual activities or work packages to establish a cost baseline is the definition for: A Project Cost Management. B The Estimate Costs process. C The Control Costs process. D The Determine Budget process.
The Determine Budget process (Choice D) is defined as aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline. PMBOK® 7, pg 193
The accuracy of a project estimate will __________ as the project progresses through the project life cycle. A Equal the baseline B Stay the same C Decrease D Increase
The accuracy of a project estimate will increase (Choice D) as the project progresses through the project life cycle. More information is known about the project so the quality of the estimate gets better. PMBOK® 7.2, pg 201
The __________ is a time-phased budget that is used as a basis against which to measure, monitor and control overall cost performance on a project. A Resource baseline B Schedule baseline C Cost baseline D Project management plan
The cost baseline (Choice C) is the approved version of the time-phased project budget, excluding any management reserves, which can only be changed through formal change control procedures and is used as a basis for comparison to actual results. It is developed as a summation of the approved budgets for the different schedule activities. PMBOK® 7.3.3.1, pg 212
The cost management planning effort occurs __________ in project planning and sets the framework for each of the cost management processes. A Late B Never C Early D Seldom
The cost management planning effort occurs early (Choice C) in project planning and sets the framework for each of the cost management processes so that performance of the processes will be efficient and coordinated. PMBOK® 7, pg 195
The planned value (PV) of a project is $1,000. The actual cost (AC) is $450. The earned value (EV) is $325. Which planning document establishes the earned value rules for the project? A Earned value plan B Project work plan C Cost management plan D Project charter
The cost management processes and their associated tools and techniques are documented in the cost management plan. Therefore, earned value rules are documented in the cost management plan. PMBOK® 7.1, pg 196
As an experienced project manger, you have been asked to review the cost variance (CV) calculations developed by Stan, a new project manager. Stan reports that the cost variance is $500. What will you tell him? A There is a problem. You've spent $500 more than you planned up to this point in the project. B You're doing fine, but your estimate at completion (EAC) concerns me. C You're doing great. Your costs are lower than what you planned up to this point in the project. D I will need to have your budget variance (BV) numbers in order to understand how you're doing.
The cost variance (CV) is calculated using the formula CV = EV - AC. Since the number in this question is positive, earned value is $500 greater than actual cost; therefore, Stan has lower costs than were planned at this point in the project. PMBOK® 7.4.2.1, pg 218, and 7.4.2.4, pg 224
Steve has requested $100,000 for his business continuity project. He based his funding request on cost estimates for the activities he planned for the project and on a reserve for risky activities. His project is approved. He is surprised to discover that the project funding totals $115,000. What is the difference? A A mistake B A management reserve C A contingency reserve D A risk reserve
The difference between the maximum funding and the cost baseline (the requested funding) is the management reserve (Choice B). Management reserves are funds that management allocates for unseen work that is within scope of the project. PMBOK® 7.3.3.1, pgs 212-213
You are working on a large project as the project manager. You have determined that your cost variance (CV) is $50,000 and that your earned value (EV) is $125,000. What is your actual cost (AC)? A $175,000 B $50,000 C $75,000 D $125,000
The formula for Cost Variance is CV = EV - AC. Using the information given, if CV = $50,000 and EV = $125,000, then AC must equal $75,000. PMBOK® 7.4.2.4, pg 224
Your project is expected to cost $96,000; however, there are some unknowns that might cause the cost to go as high as $137,500. You have calculated that you need a management reserve of $41,500. How will you handle this reserve in your earned value calculations? A Management reserves are not included as a part of the earned value (EV) measurement calculations. B The reserve is part of the planned value (PV) for the project; therefore, no specific steps are required to manage the calculations. C The reserve is part of the estimate to complete (ETC) for the project; therefore, no specific steps are required to manage the calculations. D The reserve is part of the earned value (EV) for the project; therefore, no specific steps are required to manage the calculations.
The management reserve is not included in the cost baseline but is part of the overall project budget and funding requirements. They are not included as a part of the earned value measurement calculations (Choice A). PMBOK® 7.2.2.6, pg 206
You have been asked to review a project and develop a more accurate forecast of the cost at completion. As you talk to the project manager, it is apparent that the original estimating assumptions were accurate, and you both believe the project will continue spending money at the same rate. The planned value of the project is $10,000. The earned value is $8,000. Actual costs are $11,000. To calculate EAC you should: A Add the actual costs to date plus the budget for the remaining work. B Divide the original BAC by 0.727. C Add the actual costs to date to a new ETC that is provided by the performing organization. D Subtract AC from EAC.
The measurement to use in this case is the estimate at completion (EAC) forecast for work performed at the present CPI. First determine the CPI: The CPI is earned value divided by actual cost, or $8,000/$11,000, which equals 0.727. EAC = BAC/CPI. Choice B is the correct answer. PMBOK® 7.4.2.4, pg 224
All of the following are NOT true EXCEPT: A The accuracy of a project estimate will decrease as the project progresses through the project lifecycle. B The accuracy of a project estimate will not change as the project progresses through the project lifecycle. C The accuracy of a project estimate will become irrelevant as the project progresses through the project lifecycle. D The accuracy of a project cost estimate will increase as the project progresses through the project lifecycle.
The only true statement is Choice D: The accuracy of a project estimate will increase as the project progresses through the project lifecycle. PMBOK® 7.2, pg 201
All of the following are inputs to Control Costs EXCEPT: A Work performance data B Project schedule. C Project funding requirements. D Project management plan.
The project schedule (Choice B) is an input to Estimate Costs and Determine Budget, but not for Control Costs. PMBOK® 7, pg 194
You are a project manager working through the Determine Budget process. Your scope statement provides for a budget of $75,000, but it was prepared last year prior to your detailed analysis. Which of the following tools and techniques will you NOT use? A Cost aggregation B Reserve analysis C Funding limit reconciliation D Cost of quality
The tools and techniques for the Determine Budget process are cost aggregation (Choice A), reserve analysis (Choice B), expert judgment, historical relationships, and funding limit reconciliation (Choice C) (PMBOK® 7.3.2, pgs 211-212). Cost of quality (Choice D) is a technique used with the Estimate Costs process. PMBOK® 7.2.2.7, pg 206
Joe's project shows a SPI of 1.12 and a CPI of 1.25. His manager asks him to prepare a chart showing SPI and CPI for the past quarter. What technique is he asking Joe to use? A Variance analysis B Risk management C Trend analysis D Performance measurement
Trend analysis examines project performance over time to determine if performance is getting better or worse. PMBOK® 7.4.2.4, pg 223
Simon has been a project manager for Dandy Burger for 10 years. He has just completed the construction of Dandy Burger location #1,006. All locations are the same size and based on the same construction plans. He is starting estimating for the construction at another location, which will be the 37th location where he has personally managed the construction. The estimating method he should use is: A Three-point estimates. B Reserve analysis. C Vendor bid analysis. D Analogous estimating.
When estimating costs, analogous estimating (Choice D) relies on the actual cost of previous, similar projects as the basis for estimating the cost of the current project. PMBOK® 7.2.2.2, pg 204
