CCT Earned Value Management 1 â Questions and Answers
Question 1: What does Earned Value (EV) represent in Earned Value Management?
- The actual cost of work performed to date
- The budgeted cost of work scheduled to be done
- The budgeted value of work actually completed (Correct answer)
- The forecasted cost at project completion
Correct answer: The budgeted value of work actually completed
Earned Value (EV), also called Budgeted Cost of Work Performed (BCWP), represents the budgeted value of the work that has actually been completed.
Question 2: Which formula correctly calculates the Cost Performance Index (CPI)?
- CPI = AC / EV
- CPI = EV / AC (Correct answer)
- CPI = PV / EV
- CPI = EV / PV
Correct answer: CPI = EV / AC
CPI = EV / AC; it measures how efficiently budget is being used, with values above 1.0 indicating under-budget performance.
Question 3: A Schedule Performance Index (SPI) of 0.85 indicates that the project is:
- Ahead of schedule
- On schedule
- Behind schedule (Correct answer)
- Over budget
Correct answer: Behind schedule
An SPI below 1.0 means less work has been completed than was planned, indicating the project is behind schedule.
Question 4: What is the Budget at Completion (BAC)?
- The total actual cost incurred at project end
- The total authorized budget for the project (Correct answer)
- The estimated cost needed to finish remaining work
- The variance between planned and actual costs
Correct answer: The total authorized budget for the project
BAC is the total authorized budget assigned to the project scope, established during baseline planning.
Question 5: Planned Value (PV) is also commonly referred to as:
- Budgeted Cost of Work Performed (BCWP)
- Actual Cost of Work Performed (ACWP)
- Budgeted Cost of Work Scheduled (BCWS) (Correct answer)
- Estimate at Completion (EAC)
Correct answer: Budgeted Cost of Work Scheduled (BCWS)
Planned Value (PV) is the traditional term BCWSâBudgeted Cost of Work Scheduledârepresenting the authorized budget for work planned by a given date.
Question 6: If EV = $80,000 and AC = $95,000, what is the Cost Variance (CV)?
- +$15,000
- -$15,000 (Correct answer)
- +$175,000
- -$175,000
Correct answer: -$15,000
CV = EV - AC = $80,000 - $95,000 = -$15,000, indicating the project is $15,000 over budget for the work completed.
Question 7: What does a positive Schedule Variance (SV) indicate?
- The project is over budget
- The project is under budget
- The project is ahead of schedule (Correct answer)
- The project is behind schedule
Correct answer: The project is ahead of schedule
SV = EV - PV; a positive SV means more work value has been earned than was planned, indicating the project is ahead of schedule.
CCT Earned Value Management 1
What does Earned Value (EV) represent in Earned Value Management?