CPE Cost Estimation & Budget Control 5

Question 1

An S-curve in project cost management is used to represent:

Accepted Answer

Cumulative planned and actual costs over time

Answer

An S-curve plots cumulative planned value, earned value, and actual cost over time, showing typical slow-start, rapid-mid, and tapering-end cost patterns.

Question 2

Which technique involves identifying and quantifying the uncertainties in cost estimates using probability distributions?

Accepted Answer

Monte Carlo simulation

Answer

Monte Carlo simulation runs thousands of iterations using probability distributions for each cost element to produce a range of possible total costs.

Question 3

A contractor is awarded a Cost-Plus-Incentive-Fee (CPIF) contract. The fee increases when:

Accepted Answer

Actual costs are lower than the target cost

Answer

In CPIF contracts, the contractor earns a higher fee when actual costs come in below the target cost, incentivizing cost efficiency.

Question 4

Variance at Completion (VAC) is calculated as:

Accepted Answer

BAC - EAC

Answer

VAC = BAC - EAC, representing the expected final cost variance (positive = under budget, negative = over budget) at project completion.

Question 5

Which element of the Work Breakdown Structure (WBS) is typically the lowest level used for cost estimation?

Accepted Answer

Work package

Answer

Work packages are the lowest WBS level where costs can be reliably estimated, scheduled, and tracked.

(CPE) Certified Planning Engineer Practice Test

(CPE) Certified Planning Engineer Practice Test

CPE Cost Estimation & Budget Control 5