PMP Managing Budget and Costs 5

Question 1

A project has spent $400,000 to date with a CPI of 0.80. What was the Earned Value (EV)?

Accepted Answer

$320,000

Answer

CPI = EV / AC → 0.80 = EV / $400,000 → EV = $320,000.

Question 2

What is the key difference between contingency reserves and management reserves from a budget control perspective?

Accepted Answer

Contingency reserves are in the cost baseline; management reserves are not

Answer

Contingency reserves are part of the cost baseline for known risks, while management reserves sit outside the baseline for unknown unknowns.

Question 3

A project manager is conducting a cost-benefit analysis. The project costs $200,000 and delivers $350,000 in benefits. What is the benefit-cost ratio (BCR)?

Accepted Answer

1.75

Answer

BCR = Benefits / Costs = $350,000 / $200,000 = 1.75, indicating the project delivers $1.75 in benefits for every $1 spent.

Question 4

Which funding limit reconciliation technique adjusts the schedule to accommodate periods when project funding will be constrained?

Accepted Answer

Funding limit reconciliation

Answer

Funding limit reconciliation aligns the planned spending profile with funding constraints, often requiring schedule adjustments.

Question 5

A project was originally budgeted at $1,000,000. After several approved scope changes, the budget increased to $1,200,000. The current approved budget is known as the:

Accepted Answer

Budget at Completion (BAC)

Answer

The BAC is the total authorized budget for the project, which is updated when approved scope changes alter the cost baseline.

PMP - Project Management Professional Practice Test

PMP - Project Management Professional Practice Test

PMP Managing Budget and Costs 5