Project Cost Management

1) Project Cost Management includes all of the following processes except:

a) Estimate Costs
b) Evaluate costs
c) Determine Budget
d) Control Costs

2) Which of the following choices indicates that a project has a burn rate of 1.2? Hint: Burn rate
is the same as the Cost Performance Index
a) The BCWS is 100 and the BCWP is 120
b) The ACWP is 100 and the BCWP is 120
c) The ACWP is 120 and the BCWP is 100
d) The BCWP is 100 and the BCWS is 120

3) The inputs to ‘Determine Budget’ includes all of the following except:

a) Cost estimates
b) Cost baseline
c) Scope baseline
d) Project schedule

4) During the four month update on a 1 year, $50,000 project, the analysis shows that the
BCWS is $14,000; the BCWP is $20,000 and the ACWP is $15,000. What can be determined
from these figures?
a) The project is behind schedule and over budget
b) The project is ahead of schedule and under budget
c) The project is ahead of schedule and over budget
d) The project is behind schedule and under budget

5) The process of developing an approximation of the monetary resources needed to complete

project activities is known as
a) Estimate Costs
b) Determine Budget
c) Control Costs
d) Both a & b

6) Which of the following Cost Management Processes are concerned with cost baseline?
a) Estimate Costs
b) Determine Budget
c) Control Costs
d) b and c
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7) ‘Control Costs’ is concerned with:

a) Allocating the overall estimates to individual work packages in order to establish a cost
baseline.
b) Influencing the factors that create changes to the authorized cost baseline to ensure that
all change requests are acted on in a timely manner.
c) Informing appropriate stakeholders of all approved changes and associated costs.
d) b and c

8) Which of the following statements concerning bottom-up estimating is true?

a) The cost and accuracy of bottom-up cost estimating are typically influenced by the size or
other attributes of the individual activity or work package.
b) Smaller work items increase both cost and accuracy.
c) Larger work items increase both cost and accuracy.
d) a and b

9) Percent complete is calculated by :

a) ACWP/BAC
b) BCWP-ACWP
c) BCWP/BAC
d) EAC/BAC

10) Which of the following is a direct project cost?

a) Lighting and heating for the corporate office
b) Workers Compensation insurance
c) Piping for an irrigation project
d) Corporate executives salary

11) Analogous cost estimating -

a) Is frequently used to estimate costs when there is a limited amount of detailed information
about the project is available.
b) Uses the actual costs from a previous, similar project as the basis for estimating the cost
of current project.
c) Analogous cost estimating is generally less costly than other techniques, but it is also
generally less accurate. It is most reliable when previous projects are similar in fact, and
not just in appearance, and the project team members preparing the estimates have the
needed expertise.
d) All of the above.

12) EAC is equal to:

a) ACC + ETC
b) ACC + (BAC – EV)
c) ACC + [(BAC + EV) / CPIC]
d) a & b
Cost Management Page 143

Questions: 13 - 16
Task BCWS ACWP BCWP
1 $ 950 $ 1000 $ 950
2 $ 1500 $ 1300 $ 1100
3 $ 1300 $ 1300 $ 1300
4 $ 800 $ 800 $ 900
5 $ 1000 $ 1000 $ 900

13) Which task is on schedule with a cost variance of $0?

a) Task 1
b) Task 2
c) Task 3
d) Task 4

14) Which task has the greatest schedule variance?

a) Task 1
b) Task 2
c) Task 3
d) Task 4

15) Which task is most over budget?

a) Task 1
b) Task 2
c) Task 3
d) Task 4

16) Which task is ahead of schedule and under cost?

a) Task 1
b) Task 2
c) Task 3
d) Task 4

17) Parametric cost estimating -

a) Is a technique that uses a statistical relationship between relevant historical data & other
variables to calculate a cost estimate for project work.
b) Can produce higher levels of accuracy depending upon the sophistication and underlying
data built into the model.
c) Can be applied to a total project or to segment of a project, in conjunction with other
estimating models
d) All of the above
Page 144 Cost Management

18) A cost management plan -

a) A subsidiary element of the project schedule.
b) Describes how the project costs will be planned, structured, and controlled.
c) The cost management plan is contained in, or is a subsidiary plan of, the project
management plan.
d) b and c

19) One of the types of cost estimation is Rough Order of Magnitude. This estimate:
a) is performed when detailed information is available
b) is performed after the scope is clearly defined
c) is a near perfect estimate
d) Usually made before the project is designed, and must therefore rely on the cost data of
similar projects built in the past.

20) ‘Determining budget’ is best described by which of the following?

a) The process that establishes the policies, procedures and documentation for planning,
managing, expending, and controlling project costs
b) The process of monitoring the status of the project to update the project costs and
managing changes to the cost baseline
c) The process of developing an approximation of the monetary resources needed to
complete project activities
d) The process of accumulating costs of individual activities or work packages to establish
an authorized cost baseline.

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