Cost Management Flashcards

Which output of the Determine Budget process is used as the basis for measuring project cost performance?

Answer: Cost baseline

The cost baseline is the key output of Determine Budget and serves as the reference for measuring cost performance.

A project has a TCPI of 1.15. What does this mean for the project team?

Answer: The team must be 15% more efficient than planned to meet the BAC

TCPI > 1.0 means the team must work more efficiently than originally planned to finish within the authorized budget.

When should a project manager escalate a cost variance issue through the formal change control process?

Answer: When the variance exceeds established thresholds in the cost management plan

The cost management plan defines thresholds for when variances require escalation through formal change control.

Which cost estimating approach requires the most time and detail but typically provides the most accurate estimates?

Answer: Bottom-up estimating

Bottom-up estimating aggregates estimates for individual work packages, requiring more effort but yielding the highest accuracy.

A project's Planned Value at month 6 is $120,000, but the Earned Value is $90,000. What is the Schedule Variance?

Answer: -$30,000

SV = EV - PV = $90,000 - $120,000 = -$30,000, indicating the project is behind schedule.

What is the primary difference between a cost estimate and a cost budget?

Answer: A budget allocates costs over time and requires formal approval; an estimate does not

A cost budget allocates the cost estimates across the project timeline and requires formal approval to become the cost baseline.

Which of the following is an example of a variable cost in a project?

Answer: Contractor fees paid per deliverable completed

Variable costs change based on usage or output, such as contractor fees tied to deliverables produced.