Performance Measurement in Accounting Flashcards
7 cards from real Financial Management for Project Managers practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Performance Measurement in Accounting flashcards as text
A project has a Budget at Completion (BAC) of $500,000, Earned Value (EV) of $200,000, and Actual Cost (AC) of $250,000. What is the Cost Performance Index (CPI)?
Answer: 0.80
CPI = EV / AC = $200,000 / $250,000 = 0.80, indicating the project is over budget.
Which performance measurement baseline integrates scope, schedule, and cost to provide a unified project control baseline?
Answer: Performance Measurement Baseline (PMB)
The Performance Measurement Baseline (PMB) integrates scope, schedule, and cost for unified project control.
A project's Schedule Performance Index (SPI) is 1.15. What does this indicate?
Answer: The project is ahead of schedule
An SPI greater than 1.0 means EV exceeds PV, indicating the project is progressing faster than planned.
In Earned Value Management, what does Planned Value (PV) represent?
Answer: The authorized budget assigned to scheduled work
Planned Value (PV) is the authorized budget assigned to the work scheduled to be completed by a given point in time.
A project manager uses the formula EAC = BAC / CPI to calculate the Estimate at Completion. When is this formula most appropriate?
Answer: When current variances are expected to continue throughout the project
EAC = BAC / CPI is used when current cost performance trends are expected to persist for the remainder of the project.
What is the To-Complete Performance Index (TCPI) formula based on the original BAC?
Answer: (BAC - EV) / (BAC - AC)
TCPI = (BAC - EV) / (BAC - AC) measures the cost efficiency needed to meet the original budget target.
A project shows a Cost Variance (CV) of -$40,000. What does this mean for the project?
Answer: The project is over budget by $40,000
CV = EV - AC; a negative CV means actual costs exceeded the value of work performed, indicating an over-budget condition.