Cost Management Flashcards
7 cards from real CAPM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Cost Management flashcards as text
A project manager calculates EAC = AC + ETC. Under which assumption is this formula most appropriate?
Answer: Future work will be performed at the budgeted rate
EAC = AC + ETC (where ETC = BAC - EV) assumes future work will be completed at the originally planned (budgeted) rate.
What does a negative Schedule Variance (SV) indicate?
Answer: The project is behind schedule
SV = EV - PV; a negative SV means earned value is less than planned value, indicating the project is behind schedule.
Which process involves monitoring the status of the project to update costs and managing changes to the cost baseline?
Answer: Control Costs
Control Costs is the process of monitoring project status to update costs and managing changes to the cost baseline.
A WBS element has an estimated duration of 10 days with $500/day resource cost. What estimating technique was used if this calculation was performed?
Answer: Parametric estimating
Parametric estimating uses a statistical relationship between historical data and variables (e.g., cost per unit × quantity).
Management reserves differ from contingency reserves in that management reserves are for:
Answer: Unknown unknowns that cannot be anticipated
Management reserves address unknown unknowns—unforeseeable events—while contingency reserves cover known risks.
In Earned Value Management, what does the acronym BAC stand for?
Answer: Budget at Completion
BAC (Budget at Completion) is the total budget authorized for the project.
A project team is using three-point estimating with the following values: Optimistic=$10K, Most Likely=$15K, Pessimistic=$26K. What is the PERT estimate?
Answer: $16,000
PERT = (O + 4ML + P) / 6 = ($10K + 4×$15K + $26K) / 6 = $96K / 6 = $16,000.