PMP - PROJECT COST MANAGEMENT

The cost management plan has all of the following characteristics, EXCEPT:

• It is based on project cost estimates and is separate from the project management plan.

• It may specify variance thresholds for monitoring cost performance to indicate an agreed-upon amount of variation to be allowed before some action needs to be taken.

• It may specify the level of precision, which is the degree to which activity cost estimates will be rounded up or down.

• It describes how the project costs will be planned, structured, and controlled.

All of the following are true about cost estimates EXCEPT:

• Cost estimates are generally expressed in units of some currency (i.e., dollars, euros, yen, etc.), although in some instances other units of measure, such as staff hours or staff days, are used to facilitate comparisons by eliminating the effects of currency fluctuations.

• Costs are estimated for all resources that will be charged to the project.

• Information in the risk register should not be considered in cost estimates, because risks can be either threats or opportunities and their impacts tend to balance out.

• A cost estimate is a quantitative assessment of the likely costs for resources required to complete the activity. Cost estimates may be presented at the activity level or in summary form.

Analogous cost estimating:

• Integrates bottom-up estimating techniques with relevant statistical relationships to estimate the cost of the current project.

• Relies on the actual cost of previous, similar projects as the basis for estimating the cost of the current project.

• ls used most frequently in the later phases of a project.

• Summarizes estimates for individual work packages to estimate the cost of the current project.

The cost performance baseline has all of the following characteristics, EXCEPT:

• It is the approved version of the time-phased project budget, excluding any management reserves, and is used as a basis for comparison with actual results

• It shows the actual cost expenditures throughout the project life cycle.

• It is developed as a summation of the approved budgets for the different schedule activities

• It is typically displayed in the form of an S-curve.

Project cost control includes all of the following, EXCEPT:

• Informing appropriate stakeholders of all approved changes and associated costs.

• Monitoring cost performance to isolate and understand variances from the approved cost baseline.

• Influencing the factors that create changes to the authorized cost baseline.

• Allocating the overall estimates to individual work packages to establish a cost baseline.

The estimate at completion (EAC) is typically based on:

• The actual costs incurred for work completed (AC), and the estimate to complete (ETC) the remaining work.

• The actual costs incurred for work completed (AC) and the cumulative cost performance index (CPI).

• The earned value (EV) and the actual cost for work completed (AC).

• The cost performance index (CPI) and the cost variance (CV).

Your earned value management analysis indicates that your project is falling behind its baseline schedule. You know this because the cumulative EV is much:

• Higher than the cumulative AC.

• Higher than the cumulative PV.

• Lower than the cumulative PV.

• Lower than the cumulative CPI.

Which of the following cumulative measures indicates that your project is about 9% under budget?

• The cumulative AC was 100, and the cumulative EV was 110.

• The cumulative PV was 100, and the cumulative AC was 110.

• The cumulative AC was 110, and the cumulative EV was 100.

• The cumulative EV was 100, and the cumulative PV was 110.

During the sixth monthly update on a 10-month, $300,000 project, analysis of the earned value management data shows that the cumulative PV is $190,000, the cumulative AC is $120,000, and the cumulative EV is $150,000. In planning its action, the project management team can conclude all of the following from these measures, EXCEPT:

• Less has been accomplished than was planned.

• Less has been spent than was planned.

• Continuing performance at the same efficiency with no management intervention, the project will probably be completed behind schedule and under budget.

• Continuing performance at the same efficiency with no management intervention, the project will probably be completed ahead of schedule and over budget.

Earned value (EV) involves all of the following, EXCEPT:

• Value of the work performed expressed in terms of the budget authorized for that work.

• Actual cost for an activity or work breakdown structure (WBS) component.

• Progress measurement criteria, which should be established for each WBS component to measure work in progress.

• Budget associated with the authorized work that has been completed.