Cost Control and Budgeting Flashcards

A CAM needs to add newly authorized in-scope work to a control account. Which is the correct source of budget?

Answer: Undistributed budget allocated through a formal budget change request

Newly authorized work receives budget from undistributed budget via a documented, approved change.

What is the Variance at Completion (VAC) if BAC is $800,000 and EAC is $920,000?

Answer: −$120,000

VAC = BAC − EAC = $800,000 − $920,000 = −$120,000, a projected overrun.

Which earned value technique is most appropriate for a discrete work package with tasks spanning several months and measurable interim outputs?

Answer: Weighted milestones or percent complete with objective criteria

Longer discrete work packages need objective interim measures such as weighted milestones to claim EV accurately.

A control account's cumulative cost variance exceeds the reporting threshold. What must the CAM prepare?

Answer: A variance analysis report explaining cause, impact, and corrective action

Threshold breaches require a variance analysis documenting root cause, impact, and the corrective action plan.

Why is retroactively changing budgets for completed work generally prohibited in an EVMS?

Answer: It distorts historical performance data and masks true variances

Retroactive changes erase the performance record and hide overruns, undermining baseline integrity.

A work package has PV of $60,000, EV of $45,000, and AC of $50,000. What are the cost and schedule variances?

Answer: CV = −$5,000 and SV = −$15,000

CV = EV − AC = −$5,000 and SV = EV − PV = −$15,000, so the package is over cost and behind schedule.

What is the primary purpose of a rolling wave planning approach in control account budgeting?

Answer: Detail-plan near-term work while holding far-term budget in planning packages

Rolling wave planning converts planning packages into detailed work packages as work approaches, keeping plans realistic.