PCC Cost Estimation & Budgeting 2

Question 1

A project manager uses historical data from three similar past projects to estimate the cost of a new facility. This technique is best described as:

Accepted Answer

Analogous estimating

Answer

Analogous estimating uses actual values from previous similar projects as the basis for estimating the current project.

Question 2

Which cost estimating technique multiplies a measured unit (e.g., cost per square foot or cost per labor hour) by the quantity of units required?

Accepted Answer

Parametric estimating

Answer

Parametric estimating uses statistical relationships between historical data and project variables such as cost per unit.

Question 3

During the planning phase, a contingency reserve of 15% is added to the cost baseline. What risk type does this reserve primarily address?

Accepted Answer

Known-unknown risks

Answer

Contingency reserves address known-unknown risks — identified risks for which the probability and impact have been assessed.

Question 4

A project's cost performance index (CPI) is 0.85. What does this indicate?

Accepted Answer

For every dollar spent, $0.85 of work is being accomplished

Answer

A CPI of 0.85 means only $0.85 of budgeted work value is being delivered for each $1.00 actually spent.

Question 5

Which budgeting document represents the time-phased authorized cost plan used to measure, monitor, and control project costs?

Accepted Answer

Cost baseline

Answer

The cost baseline is the approved, time-phased budget against which project cost performance is measured and controlled.

(PCC) Project Controls Certification Practice Test