CPM CPM Budget & Cost Management 2

Question 1

Which cost estimation technique calculates cost per unit and multiplies by the number of units?

Accepted Answer

Parametric estimating

Answer

Parametric estimating uses statistical relationships between historical data and variables (e.g., cost per square foot) to calculate cost estimates with greater accuracy.

Question 2

In EVM, the Estimate to Complete (ETC) represents:

Accepted Answer

The expected cost to finish all remaining project work

Answer

ETC is the expected cost of completing the remaining project work, calculated as EAC minus AC when using the current CPI to forecast future performance.

Question 3

What does a negative Cost Variance (CV) indicate in Earned Value Management?

Accepted Answer

The project is over budget

Answer

A negative CV (EV minus AC) means more money has been spent than the value of work accomplished, signaling an over-budget condition.

Question 4

Life cycle costing in project management refers to:

Accepted Answer

Considering the total cost of ownership including operations and maintenance

Answer

Life cycle costing evaluates the total cost of a deliverable over its entire useful life, including acquisition, operations, maintenance, and disposal costs.

Question 5

Which CPM cost control tool shows cumulative planned versus actual cost over time on a graph?

Accepted Answer

S-curve

Answer

An S-curve plots cumulative planned value and actual cost over time, forming an S-shaped line that visually highlights cost variance trends.

(CPM) Certified Project Manager Practice Test

(CPM) Certified Project Manager Practice Test

CPM CPM Budget & Cost Management 2