PRACTICE QUESTIONS

Music Festival

A guitar shop is putting together a local music festival. The project manager who is heading up the project wants to use earned value metrics to
calculate how well they are sticking to the budget and schedule. The following calendarized budget was created during the planning phase of the
project.

Music Festival Project Week 1 Week 2 Week 3 Week 4 Week 5 Week 6 Week 7 Week 8 Task Totals
1.0 Reserve Park                  
1.1 Review Available Dates $2,000               $2,000
1.2 Approve Festival Date and Make Deposit   $2,000             $2,000
2.0 Book Headline Performers                  
2.1 Contact Agents for Possible Headliners   $3,500 $5,500           $9,000
2.2 Finalize Headliner Contracts       $2,000 $7,000       $9,000
2.3 Create Posters           $1,800 $1,300   $3,100
3.0 Vendors                  
3.1 Advertisement for Vendors     $500           $500
3.2 Review and Approve Vendor Applications       $1,200 $2,100 $600     $3,900
3.3 Create Map of Vendor Booth Locations             $800 $1,100 $1,900
Weekly Work Totals $2,000 $5,500 $6,000 $3,200 $9,100 $2,400 $2,100 $1,100 $31,400

At the end of week 4, what is the Planned Value of the project?

At the end of week 4, what is the Planned Value of the project, using the 50/50 rule?

At the end of week 4, what is the Planned Value of the project, using the 0/100 rule?

Playground Construction Project

An elementary school principal is working with a contractor to get a new playground installed during summer break. All the required equipment
and parts were purchased and delivered on budget before the project started. The labor estimate is $3000. During their weekly status report
meeting, the contractor gives the principal the following values from their project tracking software: Earned Value = $1200, Planned Value =
$1800, Actual Cost = $1100.

What is the project Cost Variance?

What is the project Cost Performance Index?

What is the project Estimate at Completion?

What is the project Estimate to Complete?

What is the project To Complete Performance Index?

What is the project Schedule Variance?

What is the project Schedule Performance Index?

What is the project Percent Complete Index?

ANSWER KEY

Music Festival

A guitar shop is putting together a local music festival. The project manager who is heading up the project wants to use earned value metrics to
calculate how well they are sticking to the budget and schedule. The above calendarized budget was created during the planning phase of the
project.

At the end of week 4, what is the Planned Value of the project?

$2,000 + $5,500 + $6,000 + $3,200 = $16,700

Add up the totals at the bottom of the columns for each of the first four weeks of the project.

At the end of week 4, what is the Planned Value of the project, using the 50/50 rule?

$2,000 + $2,000 + $9,000 + 50% * ($2,000 + $7,000) + $500 + (50% * ($1,200 + $2,100 + $600) =

$13,500 + 50% * $9,000 + 50% * $3,900 =

$19,950

Add up all the tasks that should be completed by the end of Week 4. Ignore all the tasks that shouldn’t start until after Week 4. Add in
50% of the total of each task that should be in progress at the end of Week 4 – the entire task total, no matter how many weeks it goes
should be included.

At the end of week 4, what is the Planned Value of the project, using the 0/100 rule?

$2,000 + $2,000 + $9,000 + $500 = $13,500

Add up all the tasks that should be completed by the end of Week 4. Ignore all the tasks that shouldn’t be completed until after Week 4.

NOTE: The same process can be used to calculate either Earned Value or Planned Value. Earned Value is based on the percent of work
completed, while Planned Value is based on the percent of work the schedule shows should be completed. That percentage times the budget is
the EV or PV for that task.
Playground Construction Project

An elementary school principal is working with a contractor to get a new playground installed during summer break. All the required equipment
and parts were purchased and delivered on budget before the project started. The labor estimate is $3000. During their weekly status report
meeting, the contractor gives the principal the following values from their project tracking software: Earned Value = $1200, Planned Value =
$1800, Actual Cost = $1100.

What is the project Cost Variance?

$1200-$1100 = $100 (the project is currently $100 under budget)

What is the project Cost Performance Index?

$1200/$1100 = 1.09 (they are receiving one dollar and nine cents’ worth of value for every dollar spent on the project)

What is the project Estimate at Completion?

$3000/1.09 = $2750 (at this rate, the project is likely to cost about $2750, which is a little bit less than originally budgeted)

What is the project Estimate to Complete?

$2750-$1100 = $1650 (they will only need $1650 more to complete the project, if they keep spending at this rate)

What is the project To Complete Performance Index?

($3000-$1200)/($3000-$1100) = $2800/$2900 = .97 (the project can get as low as 97 cents’ worth out of every dollar they spend for the
second half of the project and still come in on budget, the formula compares how much work is left to how much money is left)

What is the project Schedule Variance?

$1200-$1800 = $600 (the project needs to spend an extra $600 in labor to get caught up on the schedule)

What is the project Schedule Performance Index?

$1200/$1800 = .67 (of the work that should be completed by now, only two thirds of that is actually completed)

What is the project Percent Complete Index?

$1200/$3000 = .4 (the project is 40% complete)