Project Cost Management Knowledge Area

A project manager is preparing the Cost Management Plan. What is a key component that should be addressed in this plan?

• The project schedule.

• The project scope statement.

• The project team's expertise.

• How costs will be estimated, budgeted, managed, and controlled.

In the Cost Management Plan, what is the purpose of the Cost Performance Baseline?

• To track the project's overall goals and objectives.

• To provide a reference for project performance measurement.

• To allocate project resources.

• To determine the critical path of the project.

During the Control Costs process, the project manager identifies that the project is running over budget. What corrective action should the project manager take first?

• Request additional funding from stakeholders.

• Reduce the scope of the project to save costs.

• Analyze the cost variance and assess potential corrective actions.

• Decrease quality standards to bring costs back in line.

During the Control Costs process, the project manager notices that the actual project costs are consistently below the baseline budget. What action should the project manager take?

• Celebrate the cost savings with the team and stakeholders.

• Continue as planned, as cost savings are always a positive outcome.

• Investigate the reasons for the lower costs and determine if any adjustments are needed.

• Increase spending to ensure quality standards are met.

What is the primary goal of the Determine Budget process in the Cost Management Plan knowledge area?

• To calculate the project's Return on Investment (ROI).

• To estimate the costs of individual project activities.

• To establish the project cost baseline.

• To identify cost variances.

A project manager is using the Bottom-up Estimating technique to estimate costs. What does this technique involve?

• Estimating costs based on expert judgment.

• Calculating costs by summing up the costs of individual work packages or activities

• Using historical data to estimate costs.

• Using a predetermined value to estimate costs.

What is the primary goal of the Control Costs process in the Cost Management Plan knowledge area?

• To calculate the project's Return on Investment (ROI).

• To estimate the costs of individual project activities.

• To analyze cost variances and take corrective actions.

• To establish the project cost baseline.

During the Plan Cost Management process, the project manager is considering using Three-Point Estimating. What does this technique involve?

• Using a single estimate to estimate costs.

• Taking the average of three different cost estimates.

• Using the most optimistic, most pessimistic, and most likely estimates to calculate an expected cost.

• Using historical project data to estimate costs.

During the Determine Budget process, what is the primary output that defines the authorized funding for the project?

• Cost Management Plan.

• Cost Baseline.

• Budget at Completion (BAC).

• Cost Performance Baseline.

A project manager is analyzing cost variances using Earned Value Management (EVM). If the Cost Variance (CV) is negative, what does it indicate?

• The project is ahead of schedule.

• The project is under budget.

• The project is over budget.

• The project is behind schedule.