PMBOK PMBOK Project Cost Management Questions and Answers 2

Question 1

What is the Cost Performance Index (CPI) formula and what does a CPI of 0.85 indicate?

Accepted Answer

CPI = EV/AC; for every dollar spent, only $0.85 of value is being produced (over budget)

Answer

CPI = PV/AC; the project is over budget

Answer

CPI = AC/EV; the project is under budget

Answer

CPI = EV/PV; the project is behind schedule

Question 2

Which cost management concept refers to an approved change to the cost baseline?

Accepted Answer

Re-baselining

Answer

Cost variance

Answer

Management reserve

Answer

Control account

Question 3

What is the Estimate to Complete (ETC) in Earned Value Management?

Accepted Answer

The expected cost to finish the remaining project work

Answer

The total project budget minus actual cost to date

Answer

The original budget minus cost variance

Answer

The sum of actual cost and management reserve

Question 4

What is the difference between direct costs and indirect costs in project cost management?

Accepted Answer

Direct costs are attributable to a specific project; indirect costs are shared across multiple projects or the organization

Answer

Direct costs are variable; indirect costs are fixed

Answer

Direct costs are labor only; indirect costs cover materials

Answer

Direct costs are budgeted; indirect costs are unplanned

Question 5

Which formula is used to calculate the To-Complete Performance Index (TCPI) based on Budget at Completion (BAC)?

Accepted Answer

TCPI = (BAC - EV) / (BAC - AC)

Answer

TCPI = EV / AC

Answer

TCPI = (BAC - AC) / EV

Answer

TCPI = EV / PV

Question 6

Cost aggregation in the Determine Budget process means:

Accepted Answer

Rolling up work package cost estimates by WBS level to establish the project budget

Answer

Breaking the total budget into work packages for tracking

Answer

Assigning contingency reserves to individual activities

Answer

Comparing planned costs to actual expenditures