CCT Cost Control & Monitoring 5 — Questions and Answers
Question 1: A project team uses a 'control account plan' (CAP). Which of the following is NOT typically included in a CAP?
- Work scope description
- Time-phased budget
- Detailed risk mitigation strategies for each risk (Correct answer)
- Assigned control account manager
Correct answer: Detailed risk mitigation strategies for each risk
A CAP documents scope, schedule, and budget for a control account; detailed risk mitigation strategies belong in the risk register, not the CAP.
Question 2: Forecast accuracy in cost monitoring is BEST improved by:
- Using only the original estimate at the start of the project
- Regularly updating ETC based on actual progress and remaining work assessment (Correct answer)
- Averaging CPI across all projects in the portfolio
- Applying a fixed 10% contingency to remaining work
Correct answer: Regularly updating ETC based on actual progress and remaining work assessment
Continuously re-estimating the cost to complete (ETC) based on current knowledge of actual progress and remaining work improves forecast reliability.
Question 3: Which cost control document formally authorizes the project team to spend funds on a specific work package?
- Work authorization document (WAD) (Correct answer)
- Project charter
- Funding requisition form
- Cost baseline report
Correct answer: Work authorization document (WAD)
A Work Authorization Document formally releases budget and authorizes work to begin on a specific work package within the control account.
Question 4: On a cost performance report, an 'at-completion variance' that worsens each period despite corrective actions most likely indicates:
- The corrective actions are working but have a time lag
- The root cause has not been addressed or the corrective plan is insufficient (Correct answer)
- Management reserve has been fully consumed
- The BAC was incorrectly calculated at project start
Correct answer: The root cause has not been addressed or the corrective plan is insufficient
A persistently worsening at-completion variance despite corrective actions signals that the underlying root cause remains unresolved or the corrective plan is inadequate.
Question 5: In integrated cost/schedule control, a project with CPI = 1.10 and SPI = 0.85 is best described as:
- Under budget and on schedule
- Over budget and behind schedule
- Under budget but behind schedule (Correct answer)
- On budget and ahead of schedule
Correct answer: Under budget but behind schedule
CPI > 1.0 means under budget (cost efficient), while SPI < 1.0 means behind schedule, giving a combined condition of under budget but behind schedule.
Question 6: A cost engineer performing a 'variance analysis' identifies a significant unfavorable cost variance. The NEXT step is to:
- Update the cost baseline to reflect new conditions
- Determine the root cause and recommend corrective or preventive action (Correct answer)
- Notify the client of cost overrun immediately
- Request additional management reserve from the sponsor
Correct answer: Determine the root cause and recommend corrective or preventive action
After identifying a significant variance, the cost engineer must determine its root cause before recommending appropriate corrective or preventive measures.
Question 7: Which of the following is a key output of the 'Control Costs' process according to standard project cost management practices?
- Project funding requirements
- Cost forecasts (updated EAC) (Correct answer)
- Cost management plan
- Activity cost estimates
Correct answer: Cost forecasts (updated EAC)
Updated cost forecasts, including revised EAC and ETC, are a primary output of the Control Costs process as the project progresses.
CCT Cost Control & Monitoring 5
A project team uses a 'control account plan' (CAP).
Which of the following is NOT typically included in a CAP?