MG 485 Module 4 In-Depth Questions - Check Your Knowledge & Chapter Assignments

Deterministic

A __________ estimate is also referred to as a single-point estimate. a. deterministic b. probabilistic c. definitive d. order of magnitude

Remains the same regardless of the size or volume of work

A fixed cost is described as a cost that __________. a. is necessary to keep the organization running, but is not associated with one specific project b. only occurs because of the project and is often classified as direct labor or other direct costs c. remains the same regardless of the size or volume of work d. varies with the volume of use

Implement activity-based costing (ABC)

A manufacturing company will be purchasing two sophisticated pieces of equipment for the factory floor. The project manager for this procurement has distributed the detailed specifications to a number of vendors and is waiting for the bid responses. When analyzing the vendor's bids, the PM can do a number of things to determine if the vendor's bid prices appear to be reasonable. Which of these actions would NOT be appropriate for the vendor bid analysis? a. Compare the bids and assume that the lowest responsible offer is fair. b. Review business publications and industry websites to determine if the prices are in line with industry standards. c. Select one of the lower-priced vendors with a good reputation and negotiate with them for the best price. d. Implement activity-based costing (ABC).

Developing a design that, once approved, guides the team

An example of a nonrecurring cost is __________. a. cost of writing code b. cost of laying bricks c. developing a design that, once approved, guides the team d. cost of running an assembly line in a factory

Ask the manager questions about the new office space to understand the departments that will be located there, the level of finishes desired, etc. Then base the new budget on previous, similar projects.

An experienced project manager has successfully managed many new office build-outs for their East Coast company. The company just announced that they will be expanding operations to the Midwest, and a lease has been signed for 5,000 square feet of space in Cincinnati. The new office has to be up and running in 3 months, and leadership has asked for a construction estimate by the end of the day. How can the project manager come up with a credible estimate for the new space quickly? a. Tell the manager that you can't come up with an estimate in a few hours. b. Ask the manager questions about the new office space to understand the departments that will be located there, the level of finishes desired, etc. Then base the new budget on previous, similar projects. c. Create a work breakdown structure by using another previous project and generate a bottom-up estimate for each work package. d. Go through all office buildouts for the past five years. Calculate an average construction cost per square foot and multiply the 5,000 square feet by this historical cost per square foot to calculate the budget.

Is necessary to keep the organization running, but is not associated with one specific project

An indirect cost is described as a cost that __________. a. is necessary to keep the organization running, but is not associated with one specific project. b. only occurs because of the project and is often classified as direct labor or other direct costs. c. repeats as the project work continues d. occurs when the project must be conducted faster than normal

Wants to work exclusively on verifying a specific approach to lessen risk

During Agile project estimating, a "spike" is undertaken when the team __________. a. wants to develop a definitive cost estimate for the entire project b. wants to work exclusively on verifying a specific approach to lessen risk c. agrees to "shift left." d. agrees to do value engineering

Executing

During which phase of a project life cycle do recurring costs typically occur? a. Planning b. Selecting and initiating c. Closing and realizing d. Executing

5; 10

The amount of money placed into contingency reserve is calculated during risk analysis and is often in the range of __________ to __________ percent of the total project. a. 5; 10 b. 10; 15 c. 15; 20 d. 25; 30

Resource roles and responsibilities

The cost management plan includes forecasting and refining cost estimates of all the project activities throughout the duration of the project, and it is integral to the cost management planning process. This plan contains descriptions, procedures, and responsibilities for all of these EXCEPT: a. cost estimating. b. budget determination. c. resource roles and responsibilities. d. cost control.

Analogous

The project manager at a software company predicts a project's costs based on previous projects that were similar to the current project. What type of cost estimating are they using? a. Parametric b. Analogous c. Bottom-up d. Rolling wave

Discounting the value of future revenue and cost streams enables better project decisions

The time value of money is relevant to project management because: a. the project manager must balance the timing of project cash inflows and outflows. b. discounting the value of future revenue and cost streams enables better project decisions. c. it is important to understand how to calculate the cost of regular and overtime labor. d. as time passes on a project, money is spent.

Teams work exclusively on verifying a specific approach, and adjust their thinking by testing as early as practical in the project anything that will need to be tested at a later stage

What does the Agile term "shift left" mean? a. Teams work exclusively on verifying a specific approach, and adjust their thinking by testing as early as practical in the project anything that will need to be tested at a later stage. b. Move stories from In Progress status on the Kanban board to the left, back to Product Backlog. c. Remove decimal places from estimates. d. Move from various locations to a co-located team environment.

Cost baseline

What is used to compare actual project spending with planned expenditures to determine if corrective action is needed? a. Cost baseline b. Critical path c. Cost estimate d. Cost management plan

Fixed costs

What type of costs do NOT depend on the size of the project? a. Variable costs b. Direct costs c. Fixed costs d. Indirect costs

Task costs

Which of the answers below is NOT one of the three types of data that Microsoft Project uses to compute each assignment's cost value? a. Assignment work hours b. Task costs c. Resource standard rate d. Resource overtime rate

Because assumptions reflect problems that will definitely happen during the course of the project

Which of these is NOT a reason for listing assumptions in the cost estimate? a. Two people from different backgrounds may view a situation differently. b. Assumptions that are not true often cause more work or manifest as risks. c. As more details are available, a project manager may review assumptions to uncover those that have now proven to be false. d. Because assumptions reflect problems that will definitely happen during the course of the project.

Schedule milestones

Which of these is NOT an example of supporting detail pertaining to cost estimates? a. Description of the project scope b. Method used to create the estimate c. Assumptions and constraints d. Schedule milestones

Production work is halted in the factory due to lack of inventory, and management pays extra for rapid delivery of additional material

Which of these is an example of an expedited cost? a. The team completes a major deliverable within the normal 40-hour work week. b. New computers are delivered per the agreed dates in the executed purchasing agreement. c. Production work is halted in the factory due to lack of inventory, and management pays extra for rapid delivery of additional material. d. Summer months are slow for the company so management establishes summer hours, where everyone gets Friday afternoons off.

Bottom-up

Which of these methods of estimating can produce the most accurate estimate? a. Parametric b. Analogous c. Bottom-up d. Rolling wave

Order of magnitude

__________ estimates are often used to seek initial project charter approval. a. Budget b. Order of magnitude c. Definitive d. Parametric

Value engineering

__________ is defined as a formal and structured approach to reducing cost without decreasing the quality or performance. a. Vendor bid analysis b. Life cycle costing c. Value engineering d. Time value of money