CCC Cost Estimation & Budgeting

Question 1

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

Accepted Answer

To allocate financial resources accurately

Answer

Cost estimation helps determine the financial resources required for a project, ensuring feasibility and budget adherence.

Question 2

Which cost estimation technique is based on historical data?

Accepted Answer

Analogous estimating

Answer

Analogous estimating uses past project data to estimate costs for similar current projects, improving accuracy in budgeting.

Question 3

What is the purpose of a contingency reserve in a project budget?

Accepted Answer

To cover unforeseen project expenses

Answer

A contingency reserve accounts for unforeseen costs, reducing financial risks and ensuring project stability.

Question 4

Which budgeting method assigns costs based on specific project activities?

Accepted Answer

Activity-based budgeting (ABB)

Answer

Activity-based budgeting (ABB) assigns costs based on project activities, improving cost efficiency and resource allocation.

Question 5

Which factor can significantly impact project cost estimation?

Accepted Answer

Fluctuating material costs

Answer

Fluctuating material costs can influence the accuracy of cost estimation, requiring regular adjustments to maintain budget accuracy.

Uncategorized Practice Test