07. Cost Management

You are leading a project to introduce a new healthcare appointment scheduling application. As you are creating plans detailing how the team will respond to possible events that may impact the project, you and the team determine the amount of cost contingency reserve needed. The cost contingency reserve should be:

• Hidden to prevent management from disallowing the reserve
• Maintained by management to cover cost overruns
• Added to each activity to provide the customer with a shorter critical path
• Added to the cost of the project to account for risks

The project manager is working with cost estimates in order to establish a baseline for measuring project performance. What process is this?

• Cost Management
• Determine Budget
• Estimate Costs
• Control Costs

You have just completed the initiating processes of a small project and are moving into project planning when a project stakeholder asks you for the project's budget and cost baseline. What should you tell her?

• The project budget can be found in the project charter, which has just been completed.
• The project management plan will not contain the project's budget and baseline; this is a small project
• The project budget and baseline will not be finalized and accepted until the planning processes are completed
• It is impossible to complete an estimate before the project management plan is created

To gain a clear indication of how the project is progressing, the buyer expects periodic reporting that includes analysis of the work that has been accomplished according to plan, the dollars that have been spent and how they reflect the planned expenses, the accepted deliverables, and evaluation of the risk events that have occurred. Which of the following represents the estimated value of the work actually accomplished?

• Earned value (EV)
• Actual cost (AC)
• Planned value (PV)
• Cost variance (CV)

The quality efforts on the project have gone through some changes during the first four months of project work. Two processes in particular have undergone extensive change. The customer is happy with the work to date, but has heard that the competition is working on a similar product. The team has been asked to analyze and create options for the customer. Value analysis is performed to get:

• More value from the cost analysis
• The team to buy into the project
• Management to buy into the project
• A less costly way of doing the same work

Management has asked ayou to update the projected cost of running your agile team through the end of the project based on the latest project data. What information will you need from the team to update this estimate?

• Resource management plan
• Burndown graph
• Release plans
• Product backlog

You recently submitted a change request to the change control board (CCB) for an updated communications management plan to include more frequent and detailed project status updates with the intent of addressing declining stakeholder engagement.

Where is the best place to find the decision status of the change request?

• Change Log

• Project Charter

• Stakeholder Register

• Lesson Learned Register

A project manager determines that actual costs to date are $5M and then estimates that approximately $4M will still need to be spent to complete the project for a total anticipated expenditure of $9M. However, the budget for the project is only $8.5M, which is a projected variance of -$0.5M. The anticipated expenditure of $9 M is documented and reported to stakeholders according to the communications management plan.

What has been reported to the stakeholders?

• Estimate to complete

• Cost Baseline

• Estimate Activity Duration

• Cost forecast

1During the evaluation of the project's financial statements at the end of a project phase, concerns about some of the charges were raised. The project manager explains that the costs were justified early in the project and as the project progressed.

Which of the following is the best input for the project manager to provide for reconciliation?

• Basis of Estimates

• Assumption Log

• Project Charter

• Cost Baseline

The project charter for a cross-functional project has already been approved. The project manager wants to identify stakeholders as soon as possible so that the project planning can start. The project manager quickly creates a document listing the project manager, project sponsor, and the project customer as the only project stakeholders. What has the project manager done wrong?

• The project manager has done nothing wrong, as the people that are documented are all project stakeholders.

• The project manager did not identify all of the project stakeholders

• The project manager should have identified all project stakeholders before the approval of the project charter.

• The project manager should have done this exercise after developing the project management plan