Project Cost Management Flashcards
7 cards from real Project Management practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Project Cost Management flashcards as text
A project has a Budget at Completion (BAC) of $200,000, Earned Value (EV) of $80,000, and Actual Cost (AC) of $100,000. What is the Cost Performance Index (CPI)?
Answer: 0.80
CPI = EV / AC = $80,000 / $100,000 = 0.80, meaning only $0.80 of value is earned for every $1 spent.
Which cost estimating technique relies on statistical relationships between historical data and project variables?
Answer: Parametric estimating
Parametric estimating uses statistical relationships between historical data and variables like cost per unit or hours per line of code.
What does a Schedule Performance Index (SPI) of 1.15 indicate?
Answer: The project is ahead of schedule
SPI > 1.0 means more work has been accomplished than planned, so the project is ahead of schedule.
A project manager is calculating the Estimate to Complete (ETC) assuming future work will be performed at the planned rate. Which formula applies?
Answer: ETC = BAC - EV
When assuming future work proceeds at the budgeted rate, ETC = BAC - EV (remaining budget minus work already earned).
Which process in Project Cost Management establishes how project costs will be estimated, budgeted, managed, monitored, and controlled?
Answer: Plan Cost Management
Plan Cost Management is the process that establishes the policies and procedures for planning, managing, and controlling project costs.
A project's Management Reserve is best described as:
Answer: Funds withheld by management for unknown unknowns
Management Reserve is budget held by senior management for unforeseen work outside the project scope (unknown unknowns).
Which of the following is an input to the Estimate Costs process?
Answer: Project schedule
The project schedule is an input to Estimate Costs because activity durations affect resource usage and therefore cost estimates.