CPL CPL Budget & Resource Management 2 — Questions and Answers
Question 1: Which of the following best describes a management reserve in program budgeting?
- Funds set aside for known risks identified in the risk register
- Budget allocated for scope changes approved by the change control board
- An amount withheld for unknown unknowns outside the current scope (Correct answer)
- The contingency buffer for schedule delays
Correct answer: An amount withheld for unknown unknowns outside the current scope
Management reserve is budget held for unknown risks (unknown unknowns) that fall outside the current authorized scope and requires executive approval to access.
Question 2: Earned Value Management (EVM) integrates three key data points. Which combination is correct?
- Planned Value, Actual Cost, and Earned Value (Correct answer)
- Budget at Completion, Cost Variance, and Schedule Variance
- Actual Cost, Forecast Cost, and Reserve Cost
- Earned Value, Future Value, and Sunk Cost
Correct answer: Planned Value, Actual Cost, and Earned Value
EVM uses Planned Value (PV), Actual Cost (AC), and Earned Value (EV) together to measure both cost and schedule performance objectively.
Question 3: A program's Estimate at Completion (EAC) is significantly higher than the original Budget at Completion (BAC). The MOST appropriate immediate action for the program manager is to:
- Reduce scope to bring the program within the original budget
- Report the variance to the program sponsor and governance board (Correct answer)
- Increase the team size to complete work faster
- Revise the EAC downward to align with the BAC
Correct answer: Report the variance to the program sponsor and governance board
When EAC significantly exceeds BAC, transparent reporting to sponsors and governance is mandatory so informed decisions about funding, scope, or schedule can be made.
Question 4: During resource planning, which technique involves identifying all deliverables and then working backwards to determine the resources needed?
- Top-down estimating
- Bottom-up estimating (Correct answer)
- Analogous estimating
- Expert judgment
Correct answer: Bottom-up estimating
Bottom-up estimating decomposes work packages into their smallest components and aggregates the resource requirements upward to get a total estimate.
Question 5: Which program financial metric measures the monetary value of work performed relative to the budget allocated for that work?
- Actual Cost (AC)
- Planned Value (PV)
- Earned Value (EV) (Correct answer)
- Cost Performance Index (CPI)
Correct answer: Earned Value (EV)
Earned Value (EV) is the budgeted value of work actually completed, representing the monetary worth of progress made on the program.
Question 6: A program manager needs to formally track which team members are responsible, accountable, consulted, and informed for each deliverable. Which tool is most appropriate?
- Work Breakdown Structure (WBS)
- RACI matrix (Correct answer)
- Gantt chart
- Risk register
Correct answer: RACI matrix
A RACI matrix assigns Responsible, Accountable, Consulted, and Informed roles to every team member for each task or deliverable.
CPL CPL Budget & Resource Management 2
Which of the following best describes a management reserve in program budgeting?