CAM Cost Control and Budgeting 2 — Questions and Answers
Question 1: A control account has a BAC of $500,000, an EV of $200,000, and an AC of $250,000. What is the Cost Performance Index (CPI)?
- 0.80 (Correct answer)
- 1.25
- 0.40
- 0.50
Correct answer: 0.80
CPI = EV / AC = $200,000 / $250,000 = 0.80, meaning the account earns $0.80 of value per dollar spent.
Question 2: In earned value management, what does the Cost Variance (CV) measure?
- The difference between earned value and actual cost (Correct answer)
- The difference between planned value and actual cost
- The difference between BAC and EAC
- The difference between earned value and planned value
Correct answer: The difference between earned value and actual cost
CV = EV − AC, showing whether work performed cost more or less than budgeted.
Question 3: A Control Account Manager discovers actual costs charged to the wrong control account. What is the appropriate corrective action?
- Process a documented cost transfer to move the charges to the correct account (Correct answer)
- Adjust the budget in the receiving account to absorb the charges
- Use management reserve to offset the misbooked costs
- Leave the charges in place and note the variance in the next report
Correct answer: Process a documented cost transfer to move the charges to the correct account
Misbooked costs must be corrected through a documented, traceable cost transfer, not budget changes or reserves.
Question 4: Which budget element is held by the program manager for unknown-unknowns and is NOT part of the Performance Measurement Baseline?
- Management reserve (Correct answer)
- Undistributed budget
- Contingency in the control account
- Summary level planning packages
Correct answer: Management reserve
Management reserve sits outside the PMB and is controlled by the program manager for unforeseen in-scope work.
Question 5: A control account shows CPI = 0.90 and SPI = 1.05. How should the CAM interpret this status?
- Work is ahead of schedule but over cost (Correct answer)
- Work is behind schedule and over cost
- Work is ahead of schedule and under cost
- Work is behind schedule but under cost
Correct answer: Work is ahead of schedule but over cost
SPI above 1.0 indicates ahead of schedule, while CPI below 1.0 indicates cost overrun.
Question 6: What is the formula for Estimate at Completion (EAC) when current cost performance is expected to continue?
- EAC = BAC / CPI (Correct answer)
- EAC = AC + BAC
- EAC = BAC − CV
- EAC = AC + (BAC − PV)
Correct answer: EAC = BAC / CPI
Dividing BAC by CPI projects total cost assuming the current cost efficiency continues to completion.
Question 7: During an Integrated Baseline Review (IBR), what is the CAM primarily expected to demonstrate?
- Understanding of the scope, schedule, budget, and risks in their control account baseline (Correct answer)
- Ability to negotiate additional management reserve
- Detailed knowledge of the customer's funding profile
- Authority to change the contract statement of work
Correct answer: Understanding of the scope, schedule, budget, and risks in their control account baseline
The IBR verifies that CAMs own and understand their baseline, including scope, resources, schedule, and risk.
CAM Cost Control and Budgeting 2
A control account has a BAC of $500,000, an EV of $200,000, and an AC of $250,000.
What is the Cost Performance Index (CPI)?