CAM Cost Control and Budgeting 3 — Questions and Answers
Question 1: A CAM needs to add newly authorized in-scope work to a control account. Which is the correct source of budget?
- Undistributed budget allocated through a formal budget change request (Correct answer)
- Borrowing budget from a future work package without documentation
- Reducing the fee to fund the new work
- Increasing EV to cover the added scope
Correct answer: Undistributed budget allocated through a formal budget change request
Newly authorized work receives budget from undistributed budget via a documented, approved change.
Question 2: What is the Variance at Completion (VAC) if BAC is $800,000 and EAC is $920,000?
- −$120,000 (Correct answer)
- +$120,000
- −$80,000
- +$920,000
Correct answer: −$120,000
VAC = BAC − EAC = $800,000 − $920,000 = −$120,000, a projected overrun.
Question 3: Which earned value technique is most appropriate for a discrete work package with tasks spanning several months and measurable interim outputs?
- Weighted milestones or percent complete with objective criteria (Correct answer)
- Level of effort
- Apportioned effort
- 50/50 applied to the entire multi-month package
Correct answer: Weighted milestones or percent complete with objective criteria
Longer discrete work packages need objective interim measures such as weighted milestones to claim EV accurately.
Question 4: A control account's cumulative cost variance exceeds the reporting threshold. What must the CAM prepare?
- A variance analysis report explaining cause, impact, and corrective action (Correct answer)
- A request to raise the threshold so the variance no longer reports
- A retroactive change to the baseline to eliminate the variance
- A transfer of the variance to management reserve
Correct answer: A variance analysis report explaining cause, impact, and corrective action
Threshold breaches require a variance analysis documenting root cause, impact, and the corrective action plan.
Question 5: Why is retroactively changing budgets for completed work generally prohibited in an EVMS?
- It distorts historical performance data and masks true variances (Correct answer)
- It requires too much administrative effort
- It automatically increases the contract value
- It converts management reserve into fee
Correct answer: It distorts historical performance data and masks true variances
Retroactive changes erase the performance record and hide overruns, undermining baseline integrity.
Question 6: A work package has PV of $60,000, EV of $45,000, and AC of $50,000. What are the cost and schedule variances?
- CV = −$5,000 and SV = −$15,000 (Correct answer)
- CV = −$15,000 and SV = −$5,000
- CV = +$5,000 and SV = +$15,000
- CV = −$10,000 and SV = −$10,000
Correct answer: CV = −$5,000 and SV = −$15,000
CV = EV − AC = −$5,000 and SV = EV − PV = −$15,000, so the package is over cost and behind schedule.
Question 7: What is the primary purpose of a rolling wave planning approach in control account budgeting?
- Detail-plan near-term work while holding far-term budget in planning packages (Correct answer)
- Delay all planning until the customer requests it
- Spread management reserve evenly across all periods
- Eliminate the need for work authorization documents
Correct answer: Detail-plan near-term work while holding far-term budget in planning packages
Rolling wave planning converts planning packages into detailed work packages as work approaches, keeping plans realistic.
CAM Cost Control and Budgeting 3
A CAM needs to add newly authorized in-scope work to a control account.
Which is the correct source of budget?