CCT Cost Control & Monitoring 2

Question 1

A project has a BAC of $500,000, an EV of $300,000, and an AC of $350,000. What is the Cost Performance Index (CPI)?

Accepted Answer

0.86

Answer

CPI = EV / AC = $300,000 / $350,000 = 0.857, meaning the project is over budget.

Question 2

Which cost control technique involves setting a maximum allowable cost for a project element and requiring redesign if that threshold is exceeded?

Accepted Answer

Design-to-cost

Answer

Design-to-cost establishes a cost ceiling for a system or component and drives design choices to stay within that limit.

Question 3

A Variance at Completion (VAC) of -$40,000 on a project means:

Accepted Answer

The project is forecasted to overrun by $40,000 at completion

Answer

VAC = BAC − EAC; a negative VAC indicates the project is forecast to cost more than its budget at completion.

Question 4

In a cost monitoring system, a 'cost trend report' primarily serves to:

Accepted Answer

Identify patterns indicating whether costs are improving or deteriorating over time

Answer

A cost trend report tracks cost performance metrics over successive periods to reveal whether the project's cost efficiency is improving or worsening.

Question 5

Which of the following best describes a 'management reserve' in project cost control?

Accepted Answer

Funds held by management for unknown unknowns outside project scope

Answer

Management reserve covers unknown risks (unknown unknowns) and is controlled by management, not the project manager.

(CCT) Certified Cost Technician Practice Test

(CCT) Certified Cost Technician Practice Test

CCT Cost Control & Monitoring 2