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's EAC using the formula EAC = AC + (BAC - EV) / CPI assumes:
Answer: Future work will continue at the current CPI
EAC = AC + (BAC - EV) / CPI assumes the current cost efficiency (CPI) will persist for all remaining work.
What is the difference between contingency reserves and management reserves?
Answer: Contingency reserves are for known unknowns; management reserves are for unknown unknowns
Contingency reserves address identified risks (known unknowns), while management reserves cover unforeseen situations (unknown unknowns).
Which document authorizes spending on a project and links the project to the organization's ongoing work?
Answer: Project charter
The project charter formally authorizes the project and gives the project manager authority to apply resources, including budget.
Life cycle costing considers:
Answer: Total cost of ownership including operation and maintenance
Life cycle costing evaluates the total cost of ownership over the product's entire life, including acquisition, operations, and disposal.
A project manager applies earned value analysis and finds Cost Variance (CV) = +$15,000. This means:
Answer: The project is $15,000 under budget
CV = EV - AC; a positive CV means earned value exceeds actual cost, so the project is under budget.
Which output of the Control Costs process directly updates the cost baseline?
Answer: Approved change requests
Only formally approved change requests can authorize changes to the cost baseline through integrated change control.
A project manager is presenting funding requirements to stakeholders. These are typically derived from which document?
Answer: Cost baseline
Funding requirements, including total and periodic funding needs, are derived from the cost baseline developed in the Determine Budget process.