Financial Management for Project Managers Cost Estimation and Budgeting 3

Question 1

Fixed costs in project management are best described as costs that:

Accepted Answer

Remain constant regardless of changes in project activity level

Answer

Vary directly with the volume of work performed

Answer

Are charged on a per-unit basis for materials used

Answer

Fluctuate based on the number of project team members

Question 2

Variable costs in a project are those that:

Accepted Answer

Change in direct proportion to the level of project activity or output

Answer

Are predetermined at project start and do not change

Answer

Are shared across multiple projects in the organization

Answer

Include only labor costs for the project team

Question 3

A project budget at completion (BAC) is $200,000. The project is 40% complete. What is the Planned Value (PV) if the project is on schedule?

Accepted Answer

$80,000

Answer

$40,000

Answer

$100,000

Answer

$120,000

Question 4

The three-point estimating technique uses optimistic, pessimistic, and most likely estimates. The PERT formula is:

Accepted Answer

(O + 4M + P) / 6

Answer

(O + P + M) / 3

Answer

(O + 2M + P) / 4

Answer

(O + P) / 2 + M

Question 5

Which cost estimating technique is most accurate but also the most time-consuming?

Accepted Answer

Bottom-up estimating

Answer

Analogous estimating

Answer

Parametric estimating

Answer

Expert judgment

Question 6

Cost aggregation in project budgeting involves:

Accepted Answer

Rolling up work package cost estimates to control accounts and then to the project total

Answer

Distributing the total budget down to individual work packages

Answer

Comparing actual costs to the baseline at the end of each phase

Answer

Calculating the cost of quality for each deliverable