Project Planning and Monitoring Budget & Cost Control 2

Question 1

What is the primary purpose of a project cost baseline?

Accepted Answer

To measure and monitor cost performance over time

Answer

The cost baseline is a time-phased budget used to compare against actual costs and track project performance.

Question 2

Which method estimates project costs by using historical data from similar past projects?

Accepted Answer

Analogous estimating

Answer

Analogous estimating uses actual costs from previous similar projects as a basis for estimating the current project.

Question 3

A project manager notices the actual cost is consistently higher than planned. What is the best immediate action?

Accepted Answer

Perform a root-cause analysis and implement corrective actions

Answer

Identifying the root cause of cost overruns allows the project manager to implement targeted corrective actions before deficits worsen.

Question 4

What does the Estimate to Complete (ETC) represent?

Accepted Answer

The expected cost to finish the remaining project work

Answer

ETC is the projected cost of completing all remaining project work from the current point forward.

Question 5

Which document formally authorizes project spending and defines cost thresholds?

Accepted Answer

Project charter

Answer

The project charter authorizes the project and often establishes high-level budget limits and spending authority.

Project Planning and Monitoring Practice Test