PMBOK PMBOK Project Cost Management Questions and Answers 2

Question 1

What is the Cost Performance Index (CPI) formula and what does a CPI of 0.85 indicate?

Accepted Answer

CPI = EV/AC; for every dollar spent, only $0.85 of value is being produced (over budget)

Answer

CPI = EV/AC; a value of 0.85 means only 85 cents of planned value is being realized for every dollar actually spent, indicating the project is over budget.

Question 2

Which cost management concept refers to an approved change to the cost baseline?

Accepted Answer

Re-baselining

Answer

Re-baselining involves formally approving changes to the cost baseline, which should only occur in response to authorized scope changes.

Question 3

What is the Estimate to Complete (ETC) in Earned Value Management?

Accepted Answer

The expected cost to finish the remaining project work

Answer

Estimate to Complete (ETC) is the expected cost needed to finish all the remaining project work, calculated as EAC minus AC.

Question 4

What is the difference between direct costs and indirect costs in project cost management?

Accepted Answer

Direct costs are attributable to a specific project; indirect costs are shared across multiple projects or the organization

Answer

Direct costs are directly attributable to a specific project (e.g., team salaries, materials), while indirect costs are overhead shared across projects (e.g., utilities, administrative staff).

Question 5

Which formula is used to calculate the To-Complete Performance Index (TCPI) based on Budget at Completion (BAC)?

Accepted Answer

TCPI = (BAC - EV) / (BAC - AC)

Answer

TCPI = (BAC - EV) / (BAC - AC) measures the required cost performance to complete remaining work within the original budget.

PMBOK - Project Management Body of Knowledge Practice Test

PMBOK - Project Management Body of Knowledge Practice Test

PMBOK PMBOK Project Cost Management Questions and Answers 2