Quiz for Project Cost Management

Definitive estimate is usually done with +/-10% accuracy, budget estimate as +/-10% - 25%, and ROM can be done with +/-50%-300%; all depends on the available information about the project. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

Control costs is the process that monitors the status of the project and keeps updated the information about the project budget and manages changes to the cost baseline. [1 - 7. Project Cost Management]

Quantitative assessment of probable costs that required to complete a project is and output of the Estimate Costs. [1 - 7.1.3 Estimate Costs: Output]

Depreciation is, for example, when the cost of a computer is written off over a 3-year period.

Scope baseline provides cost estimating process with the details about estimating subject. [1 - 7.1.1 Estimate Cost:s Inputs]

Status of an activity is judged for each half (50%) of completeness. [1 - 7.2 Determine Budget]

Determine Budget is the process that aggregates the estimated costs of work items to determine an authorized cost baseline. [1 - 7. Project Cost Management]

Project estimate and contingency reserves. The hierarchy of estimated budget is the following: Activities, Work Package, Control Account, Project, Contingency, Cost Baseline, Cost Budget. [1 - 7.2 Determine Budget]

Project manager is doing planning. [1 - 7. Project Cost Management]

All choices are right. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

Estimate costs is the process that develops an adequate numbers for expenses related to resources needed to complete project activities. [1 - 7. Project Cost Management]

All choices are right. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

Project schedule provides costs estimating with information about the activities, type and quantity of resources. [1 - 7.1.1 Estimate Cost:s Inputs]

Complete project within approved budget is the right answer. [1 - 7. Project Cost Management]

Human Resource Plan feeds Estimate Costs, but produced by Develop Human Resource Plan process. [1 - 7.1 Estimate Costs]

Integration management knowledge area supports creation of cost management plan as a part of project management plan. [1 - 7. Project Cost Management]

If the budget is higher than the Earned Value, more work is scheduled than has been completed. Therefore, the Schedule Variance SV is negative.

Cost Variance equals difference between Earned Value and Actual Cost (CV = EV - AC). Results: NEGATIVE is OVER BUDGET, POSITIVE is UNDER BUDGET. [1 - 7.3.2 Control Costs: Tools and Techniques]

Reducing or eliminating the risks may decrease estimation. [1 - 7.1 Estimate Cost]

Vendor has more risk on fixed price contract. The risk is reduces when the scope and requirements are documented in more details. [1 - Scope, Cost, Procurement project management knowledge areas]

Before any changes are made to a project, the BAC and the Project Budget have the same value. A change in project scope might change the Project Budget, but it does not change the original BAC, with also called Planned Value (PV) or Original Cost Estimate (OCE).

Schedule Performance Index is a quotient of Earned Value on Present Value (CV = EV / PV). Result means percentage of progress: >1 - good, <1 bad. [1 - 7.3.2 Control Costs: Tools and Techniques]

To keep estimations realistic through whole project they need to be refining periodically. So periodic re-estimation would be a suitable process. [1 - 7.1 Estimate Costs]

Quality is the criterion that effects both costs of the project and after implementation product maintenance expenses. Poor quality may save some funds of the project, but become times more expensive to maintain. So along with other selection criteria, the costs throughout product life cycle need to be considered, when determine the product quality. [1 - 7. Project Cost Management]

* Costs are the all expenditures to complete the project and get a product or service ready for sale.

Gross profit = $2,400,000 revenue - ($1,100,000 salaries + $280,000 equipment + $120,000 software licenses) = $900,000.

Project costs and after implementation costs, both needs to be considered during project selection process. [1 - 7. Project Cost Management]

Status of an activity is judged for its 20% and then 80% of completeness. [1 - 7.2 Determine Budget]

Control Costs is a part of Monitoring an Controlling process Group. [1 - 7. Project Cost Management]

Project Schedule feeds Estimate Costs, but produced by Develop Schedule process. [1 - 7.1 Estimate Cost]

Cost Variance (CV) is a difference between Earned Value (EV) and Actual Cost (AC). [1 - 7.3.2 Control Costs: Tools and Techniques]

Same estimation techniques as used to estimate time are applied for estimating costs., while in addition bottom-up estimation is useful. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

All choices are right. All the listed here documents are input to the Determine Budget process. [1 - 7.2 Determine Budget]

All choices may make sense, but first you need to analyze are the reasons, and come up with the options. [1 - 7.1 Estimate Costs]

Along with enterprise environmental factors and organizational process assets, all these are inputs to Estimate Costs process. [1 - 7.1 Estimate Costs]

Determine Budget constitutes amount of money authorized to spend on the project. [1 - 7.1.3 Estimate Costs]

To Complete Performance Index (TCPI) is a quotient of the remaining work to residual of money. TCPI = (BAC - EV) / (BAC - AC) [1 - 7.3.2 Control Costs: Tools and Techniques]

A make-or-buy decision is made by a company when selecting between making a product or service or buying it. Such decision is based internal rate of return IRR, and other factors, ROI, Payback Period, Present Value, Net Present Value, Benefit Ratio.

Project manager is responsible for realistic and accurate estimations, and maintain their integrity throughout the project. [1 - 7.1 Estimate Costs]

An accurate estimation may take considerable time, efforts, and costs to provide accurate estimation. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

Cost management plan describes the level of accuracy of cost estimates, control thresholds and rules of performance measurement. [1 - 7. Project Cost Management]

Cost Performance Index is a quotient of Earned Value on Actual Cost )CV = EV / AC). Results: earning per $1 spent. >1 - effective use of funds, <1 not effective use of funds. [1 - 7.3.2 Control Costs: Tools and Techniques]

Budget can be change using management process, some tasks or activities can be added to or removed from the scope of a project and thus affect the project budget.

The hierarchy of estimated budget is the following: Activity, Work Package, Control Account, Project, Contingency, Cost Baseline, Cost Budget. [1 - 7.2 Determine Budget]

Value Analysis, in other words Value Engineering, is a methodology to finding more economical way to reach the project objectives. It is the same as improving the value of product without increasing costs. [1 - 7. Project Cost Management] [http://en.wikipedia.org/wiki/Value_engineering]

Expenses are the funds used to sell products or services.

Rough order of magnitude is the right answer. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

All choices are right. [1 - 7.1 Estimate Costs]

Earned Value (EV) means how much work is done. [1 - 7.3.2 Control Costs: Tools and Techniques]

Determine Budget is one of the processes of planning process group. [1 - 7. Project Cost Management]

Revenue is the total amount of funds a vendor receives for its product or service.

Net income = $2,400,000 revenue - $1,100,000 salaries - $280,000 equipment - $120,000 software licenses - $90,000 advertising - $180,000 sales commission - $80,000 travel - $30,000 import and export duties = $520,000.

Estimates should be checked for padding and risks. [1 - 7.1 Estimate Costs]

planned value is an authorized budget assigned to complete the work. [1 - 7.3.2 Control Costs: Tools and Techniques]

Definitive estimate is usually done with +/-10% accuracy, budget estimate as +/-10% - 25%, and ROM can be done with +/-50%-300%; all depends on the available information about the project. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

All listed choices are inputs to the Estimating Costs process; however, the Human Resources Plan provides information about the resources rates, as well as rewarding expenses, which important in estimating costs. [1 - 7.1.1 Estimate Costs: Inputs]

Status of an activity is judged for its 20% and then 100% of completeness. [1 - 7.2 Determine Budget]

Risks increase pessimistic estimation cost (time) and make influence in PERT. Here also another logic that leads to the right answer. Estimating process belongs to the planning process group, Risks also identified during planning. Wrong answers belong to initiating process group.

Basis of Estimates explains the applied approach of the estimate. [1 - 7.1.3 Estimate Costs: Output]

CV = EV - AC. Based on given data, EV can be found from SV = EV - PV; EV = SV - PV = -90,000 - 550,000 = -640,000 AC can be found from CPI = EV / AC; AC = CPI * EV = 1.23 * (-640,000) = -787,200. Finally, CV = 640,000 - 787,200 = 147,200

All choices are right. [1 - 7.2 Determine Budget]

Schedule Variance equals a difference between Earned Value and Present Value(CV = EV - PV). Results: NEGATIVE is BEHIND schedule, POSITIVE is AHEAD of schedule. [1 - 7.3.2 Control Costs: Tools and Techniques]

Bottom-up estimating can be used for detailed estimating of an available activities or work package, which then rolled up into control accounts and after into overall project estimate? [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

Earned Value Management is a project management technique for measuring project performance and progress in an object manner. [1 - 7.3.2 Control Costs: Tools and Techniques]

Vendor Bid Analysis gives a reference to the costs associated with the outsources project, which can be used for calculating the internal costs. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

Estimation to Complete is a difference between Estimation at Completion and Actual Cost. This defines how much more money needs to complete the project. ETC = EAC - AC.

Control Costs is a part of Monitoring an Controlling process Group. [1 - 7. Project Cost Management]

Variance at Completion is a difference between Budget at Completion and Estimation at Completion VAC = BAC - EAC [1 - 7.3.2 Control Costs: Tools and Techniques]

All choices are right, in addition, AC + [(BAC-EV) / CPI * SPI)]. This formula calculates actual to date, plus remaining budget modified by performance. [1 - 7.3.2 Control Costs: Tools and Techniques]

Earned Value Management integrates Scope, Cost, and Schedule measures. [1 - 7.3.2 Control Costs: Tools and Techniques]

The total cost of accomplished work at its current stage. [1 - 7.3.2 Control Costs: Tools and Techniques]

Planned value (budget) that authorized assigned to complete the work. [1 - 7.3.2 Control Costs: Tools and Techniques]

The efficiency is Earned Value (EV) divided by Actual cost (AC). In this case, Efficiency = 180 / 220 = 0.81.

Control Account includes Activity Estimates and Work Packages Estimates. The hierarchy of estimated budget is the following: activity, Work Package, Control Account, Project, Contingency, Cost Baseline, Cost Budget. [1 - 7.2 Determine Budget]

Cost management plan describes the format and sets the criteria for planning, structuring, estimating, budgeting, and controlling project costs. [1 - 7. Project Cost Management]

All choices are right. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

The correct answer is now shown. Revenue = (Cost + Expense) x Markup.

Scope statement and work breakdown structure are inputs to Scope Baseline, which is used in Estimate Costs process to produce Activity Cost Estimates, along with updating Project Document. [1 - 7.1 Estimate Costs]

All choices are right. [1 - 7.1.2 Estimate Cost:s: Tools and Techniques]

All answers are right. The basis of estimate explains how the estimating process work, what sources and methodologies were used, what thresholds are, and what action to be taken when they are reached. An example of such document or even a standard could be found in enter[rise environmental factors or historical records on other projects. [1 - 7.1.3 Estimate Costs: Output]