Project Budgeting & Financial Control Flashcards

A project's Schedule Variance (SV) is −$20,000 and Cost Variance (CV) is +$15,000. Which statement BEST describes the project status?

Answer: Behind schedule but under budget

Negative SV means behind schedule; positive CV means under budget (earning more value than spent).

Which document formally authorizes the project budget and establishes the cost baseline?

Answer: Approved cost baseline

The approved cost baseline is the time-phased budget used to measure, monitor, and control project cost performance.

A PM is using the To-Complete Performance Index (TCPI) and gets a result of 1.20. What does this mean?

Answer: The project must earn $1.20 in value for every $1 of remaining budget

TCPI > 1.0 means remaining work must be performed more efficiently than past performance to meet the budget goal.

During the planning phase, which technique breaks the project into smaller components to improve the accuracy of cost estimates?

Answer: Bottom-up estimating

Bottom-up estimating decomposes work packages into smaller components and aggregates their estimates for higher accuracy.

A project manager compares the planned value to actual costs each month. This is an example of which activity?

Answer: Variance analysis

Variance analysis compares actual project performance (cost, schedule) against the plan to identify deviations.

Which input is MOST important when developing the cost management plan?

Answer: Project charter

The project charter provides the pre-approved financial resources and summary budget that inform the cost management plan.

What does a cost baseline NOT include?

Answer: Management reserve

Management reserve is added to the cost baseline to form the project budget and is NOT part of the cost baseline itself.