APMG EVM Foundation — Fundamentals of Earned Value Management — Questions and Answers

Question 1: The Integrated Baseline Review (IBR) is conducted to:

Approve contract modifications
Conduct surveillance of monthly EVM reports
Verify the contractor's baseline is realistic, complete, and measurable (Correct answer)
Review the WBS dictionary for completeness

Correct answer: Verify the contractor's baseline is realistic, complete, and measurable

The IBR is a formal review between the customer and contractor to confirm the PMB adequately reflects the project's scope, schedule, and budget.

Question 2: Which CPR/IPMR format contains the staffing plan?

Format 3 (Baseline)
Format 1 (WBS)
Format 4 (Staffing) (Correct answer)
Format 2 (OBS)

Correct answer: Format 4 (Staffing)

CPR Format 4 (now IPMR Format 4) provides the contractor's staffing plan showing headcount by labor category over time.

Question 3: Percent Complete in EVM is typically calculated as:

AC / EAC × 100
EV / BAC × 100 (Correct answer)
EV / PV × 100
AC / BAC × 100

Correct answer: EV / BAC × 100

Percent Complete = EV / BAC × 100, representing what portion of the total authorized budget has been earned.

Question 4: A positive VAC indicates:

The project is forecast to finish under the original budget (Correct answer)
The project is ahead of schedule
The project has no cost variance
The project is forecast to finish over the original budget

Correct answer: The project is forecast to finish under the original budget

VAC = BAC - EAC; when BAC > EAC, the project is expected to cost less than budgeted, yielding a positive VAC.

Question 5: The most commonly used EAC formula, assuming current CPI will continue, is:

AC + (BAC - EV) / CPI
BAC / CPI (Correct answer)
AC + (BAC - EV)
AC + ETC

Correct answer: BAC / CPI

EAC = BAC / CPI is the standard formula when assuming the current cost efficiency trend will continue for the remaining work.

Question 6: Which of these processes doesn't involve using earned value when making project purchases?

Time phase a project procurement baseline
Continue Scope definition to include make or buy analysis
Place all procurements into four generic categories (Correct answer)
Measure actual earned value performance, estimate actual costs

Correct answer: Place all procurements into four generic categories

The four generic categories" does not relate directly to employing Earned Value Management (EVM) on project procurements. The categorization of procurements into four generic categories typically refers to the classification of procurement types based on the nature of the goods or services being procured. This classification helps in understanding the procurement strategy and determining appropriate contractual and management approaches.

Question 7: What is the correct formula for Variance at Completion (VAC)?

VAC = BAC - EAC (Correct answer)
VAC = BAC - AC
VAC = EV - PV
VAC = EV - AC

Correct answer: VAC = BAC - EAC

VAC = BAC - EAC; a negative VAC result indicates a predicted cost overrun at project completion.

Question 8: What does EAC stand for in EVM?

Estimate at Completion (Correct answer)
Earned at Completion
Expected Actual Cost
Expenditure at Completion

Correct answer: Estimate at Completion

EAC (Estimate at Completion) is the expected total cost of the project when all work is finished.

Question 9: Undistributed Budget (UB) in EVM refers to:

Budget that is part of the CBB but not yet allocated to Control Accounts (Correct answer)
Reserves held outside the contract budget base
Budget that has been spent but not yet assigned to a work package
Budget from expired work packages

Correct answer: Budget that is part of the CBB but not yet allocated to Control Accounts

UB is authorized budget within the CBB that has not yet been formally assigned to Control Accounts and must be distributed promptly.

Question 10: What does the Schedule Performance Index (SPI) measure?

Ratio of actual schedule to planned schedule in days
Ratio of actual cost to planned cost
Efficiency of scheduled time utilization (Correct answer)
Efficiency of budget utilization

Correct answer: Efficiency of scheduled time utilization

SPI = EV / PV and measures how efficiently the project team is using its scheduled time.

Question 11: Who is the Control Account Manager (CAM)?

The project manager who authorizes all budgets
The customer's oversight representative
The finance officer who tracks actual costs
The individual responsible for managing a Control Account's scope, schedule, and budget (Correct answer)

Correct answer: The individual responsible for managing a Control Account's scope, schedule, and budget

The CAM is the functional manager accountable for performance within their assigned Control Account, managing its scope, schedule, and budget.

Question 12: The Performance Measurement Baseline (PMB) equals:

Contract Budget Base minus Undistributed Budget
BAC plus Management Reserve
Contract Budget Base minus Management Reserve (Correct answer)
Total Allocated Budget minus Management Reserve

Correct answer: Contract Budget Base minus Management Reserve

PMB = Contract Budget Base (CBB) - Management Reserve; the PMB is the portion of the budget allocated to planned work.

Question 13: TCPI based on EAC is calculated as:

(EV - AC) / (EAC - BAC)
(BAC - EV) / (EAC - AC) (Correct answer)
(EAC - EV) / (BAC - AC)
(BAC - AC) / (EAC - EV)

Correct answer: (BAC - EV) / (EAC - AC)

TCPI(EAC) = (BAC - EV) / (EAC - AC), measuring the efficiency needed to finish within the revised EAC.

Question 14: EVMS surveillance by DCMA is conducted to:

Calculate the contractor's EAC independently
Conduct the IBR on behalf of the program office
Verify ongoing compliance with ANSI/EIA-748 guidelines after system acceptance (Correct answer)
Approve each monthly EVM data submission

Correct answer: Verify ongoing compliance with ANSI/EIA-748 guidelines after system acceptance

DCMA surveillance monitors whether the contractor continues to implement the EVMS in accordance with the accepted system description after the initial validation.

Question 15: At project completion, the SPI always converges to which value?

1.0 (Correct answer)
The final CPI value
0
The BAC/EAC ratio

Correct answer: 1.0

At project completion, EV equals BAC and PV equals BAC, so SPI = EV/PV = 1.0 regardless of earlier schedule performance.

Question 16: A Baseline Change Request (BCR) is required when:

A CAM wants to shift budget between two of their own work packages
Any authorized change to the PMB scope, budget, or schedule is needed (Correct answer)
An estimate-at-completion is revised upward
Monthly performance data reveals a schedule variance

Correct answer: Any authorized change to the PMB scope, budget, or schedule is needed

A BCR is the formal mechanism for making authorized, documented changes to the Performance Measurement Baseline.

Question 17: Budget at Completion (BAC) represents:

The amount spent at project completion
The earned value at project completion
The forecast final cost of the project
The total authorized budget for the entire scope of work (Correct answer)

Correct answer: The total authorized budget for the entire scope of work

BAC is the sum of all budgets allocated for the total scope of the project and serves as the baseline for performance measurement.

Question 18: Apportioned effort in EVM is:

Work performed by subcontractors only
Work that is split equally among all Control Accounts
Work whose budget and schedule are directly tied as a percentage of a related discrete task (Correct answer)
An independent task that earns value at project milestones

Correct answer: Work whose budget and schedule are directly tied as a percentage of a related discrete task

Apportioned effort is used when work (e.g., quality inspection) has no independent measurable output but is directly proportional to a related discrete work package.

Question 19: Variance at Completion (VAC) is calculated as:

EV - EAC
BAC - AC
BAC - EAC (Correct answer)
EAC - BAC

Correct answer: BAC - EAC

VAC = BAC - EAC; a positive VAC indicates the project will finish under budget, while a negative VAC signals a cost overrun.

Question 20: What does a negative Cost Variance (CV) indicate in EVM?

The project has completed more work than planned
The project is under budget
The project is ahead of schedule
The project has spent more than the earned value (Correct answer)

Correct answer: The project has spent more than the earned value

A negative CV (EV - AC < 0) means actual costs exceed earned value, indicating the project is experiencing a cost overrun.

Question 21: What is the formula for TCPI based on the Budget at Completion (BAC)?

TCPI = BAC / EAC
TCPI = EV / AC
TCPI = (BAC - EV) / (BAC - AC) (Correct answer)
TCPI = (EAC - AC) / (BAC - EV)

Correct answer: TCPI = (BAC - EV) / (BAC - AC)

TCPI(BAC) = (BAC - EV) / (BAC - AC), dividing the remaining work (in budget terms) by the remaining funds available.

Question 22: If a project's cumulative CPI is 0.75 and its TCPI (based on BAC) is 1.35, what does this comparison most strongly suggest?

The project's schedule is on track despite cost issues
Completing the project within the original budget is highly unlikely (Correct answer)
The project is easily recoverable within the original budget
The EVM data is likely incorrect and needs verification

Correct answer: Completing the project within the original budget is highly unlikely

A large gap between actual CPI (0.75) and required TCPI (1.35) means the project must suddenly perform 80% more efficiently — statistically, this is extremely unlikely.

Question 23: ETC stands for which EVM term?

Earned to Complete
Estimated Total Cost
Expected Time to Completion
Estimate to Complete (Correct answer)

Correct answer: Estimate to Complete

ETC (Estimate to Complete) represents the expected cost required to finish all remaining project work.

Question 24: DCMA stands for in the context of EVM oversight:

Defense Compliance and Metrics Administration
Defense Contract Management Agency (Correct answer)
Department of Contract and Management Auditing
Defense Cost Management Authority

Correct answer: Defense Contract Management Agency

DCMA (Defense Contract Management Agency) performs surveillance of contractor EVMS compliance on DoD contracts.

Question 25: Total Allocated Budget (TAB) in EVM is:

The sum of earned values across all Control Accounts
The sum of all budgets allocated to the contract, which should equal CBB (Correct answer)
The sum of all Control Account budgets only
BAC minus Management Reserve

Correct answer: The sum of all budgets allocated to the contract, which should equal CBB

TAB = PMB + MR + UB and must equal the CBB; it is the total of all budgets allocated to the contract scope.

Question 26: Which relationship is always mathematically true in EVM?

EAC = EV + ETC
EAC = PV + ETC
EAC = AC + ETC (Correct answer)
EAC = BAC + VAC

Correct answer: EAC = AC + ETC

EAC = AC + ETC is a fundamental EVM identity: total forecast equals what has already been spent plus what remains to be spent.

Question 27: Which type of earned value technique produces the most objective and auditable performance measurement?

Planning Package budget draw-down
Subjective Percent Complete estimated by the CAM
Level of Effort
Physical Percent Complete supported by measurable criteria (Correct answer)

Correct answer: Physical Percent Complete supported by measurable criteria

Physical Percent Complete uses observable, pre-defined criteria to assess progress, making it resistant to bias and easily verifiable by oversight personnel.

Question 28: What are the three categories?

Minor (Low Risk) (Correct answer)
Major (High Risk) (Correct answer)
Almost-Routine
Routine (Correct answer)
Semi-Routine

Correct answer: Minor (Low Risk)

Major (High Risk), Minor (Low Risk), and Routine—are often used in procurement management to classify the level of risk associated with procurement activities. These categories help in determining the appropriate procurement strategies, approaches, and controls. <br> The categorization of procurements into major, minor, and routine helps in assessing the level of risk and determining appropriate procurement approaches, it is important to note that the use of Earned Value Management (EVM) in procurements is not directly related to these categories. EVM is a project management technique that focuses on measuring project performance in terms of cost and schedule and can be employed across different types of procurements, irrespective of their risk categorization.

Question 29: The Over Target Baseline (OTB) process requires which of the following?

Approval from DCMA only
No approval—contractors can self-authorize an OTB
Only internal contractor management approval
Customer approval before the PMB can be re-established above the CBB (Correct answer)

Correct answer: Customer approval before the PMB can be re-established above the CBB

An OTB requires explicit government/customer approval because it raises the PMB above the Contract Budget Base, changing the performance measurement framework.

Question 30: A project has EV = $450,000 and AC = $540,000. What is the CPI?

1.20
0.83 (Correct answer)
0.90
1.10

Correct answer: 0.83

CPI = EV / AC = $450,000 / $540,000 = 0.833, indicating cost overrun.

Question 31: A Control Account (CA) in EVM is:

An accounting ledger for tracking actual costs
A management control point where scope, budget, and schedule are integrated (Correct answer)
A WBS element at the lowest level
A report summarizing contractor performance

Correct answer: A management control point where scope, budget, and schedule are integrated

A Control Account is the primary EVM measurement point where scope, schedule, and budget baselines are integrated and performance is tracked.

Question 32: The To-Complete Performance Index (TCPI) based on BAC is calculated as:

EV / AC
(BAC - EV) / (BAC - AC) (Correct answer)
(BAC - AC) / (BAC - EV)
(EAC - AC) / (BAC - EV)

Correct answer: (BAC - EV) / (BAC - AC)

TCPI(BAC) = (BAC - EV) / (BAC - AC), representing the required cost efficiency to finish within the original budget.

Question 33: The Percent Schedule Variance (%SV) is expressed as:

(SV / BAC) × 100
(SV / PV) × 100 (Correct answer)
(SV / AC) × 100
(SV / EV) × 100

Correct answer: (SV / PV) × 100

%SV = (SV / PV) × 100, normalizing schedule variance as a percentage of the planned value.

Question 34: What does Variance at Completion (VAC) represent?

The expected cost overrun or underrun at project completion (Correct answer)
The remaining authorized budget for the project
The difference between planned and actual schedule
The total earned value of the project to date

Correct answer: The expected cost overrun or underrun at project completion

VAC = BAC - EAC, representing the projected difference between the original budget and the estimated final cost of the project.

Question 35: The Responsibility Assignment Matrix (RAM) in EVM links:

Budget to actual cost accounts
Work packages to specific labor categories
Control Accounts to the project schedule
WBS elements to organizational units responsible for performing the work (Correct answer)

Correct answer: WBS elements to organizational units responsible for performing the work

The RAM maps WBS work elements to OBS organizational elements, defining who is responsible for each Control Account.

Question 36: The Contract Budget Base (CBB) equals:

BAC plus any over-target amounts
Negotiated contract cost plus authorized unpriced work (Correct answer)
Total Allocated Budget including Management Reserve
Performance Measurement Baseline plus Undistributed Budget

Correct answer: Negotiated contract cost plus authorized unpriced work

CBB = Negotiated Contract Cost + Authorized Unpriced Work, representing the total authorized budget for the contract.

Question 37: Cost overruns are happening on a project. What is accurate regarding the Cost Performance Index? (CPI)

CV is equal to 1
CPI is greater than 1
CPI is equal to 1
CPI is less than 1 (Correct answer)

Correct answer: CPI is less than 1

When a project is experiencing cost overrun, the Cost Performance Index (CPI) will be less than 1.

Question 38: A project has EV = $300,000 and PV = $360,000. What is the SPI?

1.33
1.20
0.75
0.83 (Correct answer)

Correct answer: 0.83

SPI = EV / PV = $300,000 / $360,000 = 0.833, indicating the project is behind schedule.

Question 39: Which of the following is a common root cause for an unfavorable Cost Variance (negative CV)?

Labor costs higher than originally estimated (Correct answer)
Favorable weather conditions reducing work duration
Scope reductions formally approved by the customer
Work being completed faster than planned

Correct answer: Labor costs higher than originally estimated

Higher-than-estimated labor costs increase Actual Cost (AC) without a corresponding increase in Earned Value (EV), directly creating a negative Cost Variance.

Question 40: What does a negative Variance at Completion (VAC) indicate at the time of reporting?

The project has earned more value than planned
The project will finish ahead of schedule
The project is predicted to overrun its budget at completion (Correct answer)
The project will come in under its original budget

Correct answer: The project is predicted to overrun its budget at completion

A negative VAC (BAC - EAC < 0) means the EAC exceeds the BAC, indicating the project is projected to cost more than originally budgeted.

APMG EVM Foundation — Fundamentals of Earned Value Management

The EVM Foundation certification validates knowledge of Earned Value Management principles, performance measurement, variance analysis, forecasting, and reporting techniques used to integrate and control project scope, time, and cost objectives.

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60 min

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65%

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