Project Planning and Monitoring Budget & Cost Control

Question 1

What does Earned Value (EV) represent in project cost management?

Accepted Answer

The budgeted cost of work actually performed

Answer

The actual cost of work performed

Answer

The planned cost of work scheduled

Answer

The remaining budget for the project

Question 2

A project has a Cost Performance Index (CPI) of 0.85. What does this indicate?

Accepted Answer

The project is over budget

Answer

The project is under budget

Answer

The project is on budget

Answer

The project is ahead of schedule

Question 3

Which budgeting technique requires each budget item to be justified from zero each period?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Activity-based budgeting

Answer

Rolling wave budgeting

Question 4

What is a Budget at Completion (BAC) used for in project monitoring?

Accepted Answer

It represents the total planned budget for the entire project

Answer

It tracks actual spending to date

Answer

It calculates the cost variance

Answer

It forecasts remaining task durations

Question 5

Which formula correctly calculates Cost Variance (CV) in earned value management?

Accepted Answer

CV = EV minus AC

Answer

CV = AC minus EV

Answer

CV = PV minus EV

Answer

CV = BAC minus EV

Question 6

What is a contingency reserve in project budgeting?

Accepted Answer

Funds set aside to address identified risks within scope

Answer

Extra money added without any justification

Answer

The sponsor's emergency fund outside project control

Answer

Budget held for scope change orders only