PMBOK Project Cost Management Questions and Answers Flashcards
6 cards from real PMBOK practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 PMBOK Project Cost Management Questions and Answers flashcards as text
What is the primary purpose of the Plan Cost Management process in PMBOK?
Answer: To define how project costs will be estimated, budgeted, managed, and controlled
Plan Cost Management establishes the policies, procedures, and documentation for planning, managing, expending, and controlling project costs.
Which cost estimating technique breaks down deliverables into smaller components and estimates cost at the work package level?
Answer: Bottom-up estimating
Bottom-up estimating decomposes work into individual components, estimates cost for each, then aggregates them upward to the total project cost.
What is the Budget at Completion (BAC) in cost management?
Answer: The approved total budget for all project work
Budget at Completion (BAC) is the total approved budget for all the work in the project, representing what the project was expected to cost.
A cost estimate expressed as a range such as -25% to +75% is known as a:
Answer: Rough order of magnitude (ROM) estimate
A Rough Order of Magnitude (ROM) estimate, used in early project phases, typically has an accuracy range of -25% to +75% due to limited information.
Which PMBOK process produces the Cost Baseline?
Answer: Determine Budget
The Determine Budget process aggregates estimated costs of individual activities to establish the authorized cost performance baseline (Cost Baseline).
What does the term 'sunk cost' mean in project cost management?
Answer: Costs that have already been incurred and cannot be recovered
Sunk costs are past expenditures that have already been incurred and cannot be recovered, and PMBOK advises they should not influence future project decisions.