EVM Certification EVM Certification Cost Control & Budgeting 2 — Questions and Answers
Question 1: Which EVM metric directly measures how efficiently the project budget is being used?
- Cost Performance Index (CPI) (Correct answer)
- Schedule Performance Index (SPI)
- Schedule Variance (SV)
- Planned Value (PV)
Correct answer: Cost Performance Index (CPI)
CPI = EV / AC and is the primary indicator of cost efficiency throughout the project.
Question 2: A project's Actual Cost (AC) is $120,000 and Earned Value (EV) is $100,000. What is the Cost Variance?
- -$20,000 (Correct answer)
- +$20,000
- $0
- -$10,000
Correct answer: -$20,000
CV = EV – AC = $100,000 – $120,000 = –$20,000, indicating the project is $20,000 over budget.
Question 3: What does a TCPI greater than 1.0 indicate for remaining project work?
- Greater cost efficiency is required than has been achieved to date (Correct answer)
- The project is on track to finish under budget
- The remaining work budget exceeds what is needed
- The project can reduce spending and still meet targets
Correct answer: Greater cost efficiency is required than has been achieved to date
TCPI > 1.0 means the team must perform more efficiently than current rates to meet the budget goal.
Question 4: Which of the following best describes Control Account in EVM?
- A management control point where scope, schedule, and budget are integrated and measured (Correct answer)
- A financial account used to track vendor payments
- A summary-level WBS element with no performance measurement
- A reserve fund set aside for risk events
Correct answer: A management control point where scope, schedule, and budget are integrated and measured
Control Accounts are the primary level at which EVM performance is measured, integrating scope, schedule, and cost.
Question 5: The Management Reserve (MR) in EVM is best described as:
- Budget withheld for unknown unknowns outside the project baseline (Correct answer)
- Budget allocated for identified risks within the performance measurement baseline
- The difference between BAC and EAC
- Funds reserved for contractor fee incentives
Correct answer: Budget withheld for unknown unknowns outside the project baseline
Management Reserve is held outside the PMB for unforeseen scope changes and unknown risks, not part of EVM calculations.
Question 6: When using the 0/100 earning rule in EVM, value is credited:
- Only upon full completion of the work package (Correct answer)
- 50% at start and 50% at completion
- Proportionally based on percentage complete
- At fixed milestones during execution
Correct answer: Only upon full completion of the work package
The 0/100 rule credits zero earned value at start and 100% only when the work package is fully complete.
EVM Certification EVM Certification Cost Control & Budgeting 2
Which EVM metric directly measures how efficiently the project budget is being used?