PMP Training Kit: Cost Management

Chapter review

Test your knowledge of the information in Chapter 5 by answering these questions. The answers to these questions, and the explanations of why each answer choice is correct or incorrect, are located in the “Answers” section at the end of this chapter.

1. What is the correct order of processes in the Cost Management knowledge area?

   1. Plan Cost Management, Estimate Costs, Determine Budget, Control Costs

   2. Plan Cost Management, Determine Budget, Estimate Costs, Control Costs

   3. Plan Cost Management, Control Costs, Estimate Costs, Determine Budget

   4. Plan Cost Management, Estimate Costs, Control Costs, Determine Budget

2. What is the single output from the Plan Cost Management process?

   1. Activity cost estimates

   2. Cost baseline

   3. Cost management plan

   4. Cost forecasts

3. All of the following could be included in the cost management plan EXCEPT?

   1. A description of the accuracy of estimating.

   2. The cost reporting formats to be used.

   3. A description of the units of measure used to estimate costs.

   4. The dates each activity will occur.

4. If you are estimating the cost for an activity by comparing the current activity with similar ones you have completed in the past, what sort of estimating technique are you using?

   1. Analogous estimating

   2. Parametric estimating

   3. Three-point estimating

   4. Bottom–up estimating

5. If you are aggregating the individual activity cost estimates up to the work package level, then the sub-deliverable level, and then the deliverable level to arrive at a total project cost estimate, what sort of estimating technique are you using?

   1. Analogous estimating

   2. Parametric estimating

   3. Three-point estimating

   4. Bottom–up estimating

6. If you are applying to senior management to obtain extra funds for unforeseen costs on your project, what are you using?

   1. Contingency reserve

   2. Funding limit reconciliation

   3. Management reserve

   4. Cost aggregation

7. If you have a project with a schedule performance index (SPI) of 1.05 and a cost performance index (CPI) of 0.92, how is your project performing?

   1. The project is over budget and behind schedule.

   2. The project is over budget and ahead of schedule.

   3. The project is under budget and behind schedule.

   4. The project is under budget and ahead of schedule.

8. If the budget at completion for your project is $70,000, the earned value is $30,000, and the actual cost is $32,000, what is your estimate at completion?

   1. $70,000.00

   2. $65,625.00

   3. $74,468.08

   4. $62,000.00

9. If the budget at completion for your project is $70,000, the earned value is $30,000, and the actual cost is $32,000, what is your variance at completion?

   1. $0.00

   2. $7,375.00

   3. –$4 468.08

   4. $8 000.00

10. If the to-complete performance index calculated for the budget at completion for your project is 1.1, what does this mean?

    1. Your project is doing well and you can slow down and still achieve the budget at completion.

    2. Your project is right on track to achieve the budget at completion.

    3. You need to produce $1.10 worth of effort for every $1.00 spent to achieve the budget at completion.

    4. You need to speed up the schedule but slow down the spending.

11. Which of the following is an example of work performance information?

    1. Reserve analysis

    2. Activity cost estimates

    3. Project funding requirements

    4. Schedule variance