PCC Cost Estimation & Budgeting

Question 1

What is the primary purpose of cost estimation in project management?

Accepted Answer

To predict financial requirements for a project

Answer

To determine project risks

Answer

To eliminate budgeting needs

Answer

To extend project timelines

Question 2

Which cost estimation method relies on past project data to estimate costs?

Accepted Answer

Analogous estimation

Answer

Parametric estimation

Answer

Bottom-up estimation

Answer

Three-point estimation

Question 3

What is a key characteristic of a bottom-up cost estimation approach?

Accepted Answer

Estimates costs at a detailed component level

Answer

Uses expert judgment without data

Answer

Ignores indirect costs

Answer

Is only used for long-term projects

Question 4

Which budgeting technique assigns costs based on project deliverables?

Accepted Answer

Activity-based budgeting

Answer

Zero-based budgeting

Answer

Rolling wave planning

Answer

Analogous estimation

Question 5

Which factor can lead to cost overruns in a project budget?

Accepted Answer

Scope creep

Answer

Strict project scope control

Answer

Accurate cost estimation

Answer

Effective risk management

Question 6

What is the purpose of contingency reserves in budgeting?

Accepted Answer

To cover unforeseen project costs

Answer

To reduce project funding

Answer

To eliminate the need for cost tracking

Answer

To increase project complexity