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PM - Cost Management
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Question 1 |
Which term refers to the money it takes to sell a product after it is made?
A | Cost. |
B | Expence. |
C | Gross income. |
D | Revenue. |
Question 1 Explanation:
Expenses are the funds used to sell products or services.
Question 2 |
What funds the project budget constitutes?
A | Amount of money that aggregates estimated costs of all project activities authorized to spend on the project. |
B | Amount of money to cover direct and indirect costs of the project, plus management reserve. |
C | Amount of money to cover direct and indirect costs of the project, plus contingency and management reserve. |
D | Amount of money to cover the direct costs for planning, execution and closing of the project. The cost of project initiating is covered by company's overhead expenses. |
Question 2 Explanation:
Determine Budget constitutes amount of money authorized to spend on the project.
[1 - 7.1.3 Estimate Costs]
Question 3 |
Calculation To Complete Performance Index (TCPI)?
A | A difference between Earned Value and Actual Cost
CV = EV - AC |
B | A difference between Earned Value and Present Value
CV = EV - PV |
C | A quotient of Earned Value on Actual Cost
CV = EV / AC |
D | To Complete Performance Index (TCPI) is a quotient of the remaining work to residual of money.
(BAC - EV) / (BAC - AC) |
Question 3 Explanation:
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]
Question 4 |
What project management knowledge area supports creating cost management plan as a part of project management plan?
A | Initiation. |
B | Time management. |
C | Integration management. |
D | Planning. |
Question 4 Explanation:
Integration management knowledge area supports creation of cost management plan as a part of project management plan.
[1 - 7. Project Cost Management]
Question 5 |
What criterion makes you increase pessimistic estimation?
A | Funding constrains determined by sponsor. |
B | Time constrains specified by customer. |
C | Quality requirements provided by stakeholders. |
D | Risks identified during planning. |
Question 5 Explanation:
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.
Question 6 |
How to calculate Schedule Variance (SV)?
A | Schedule Variance is a quotient of Earned Value on Present Value
CV = EV / PV |
B | Schedule Variance equals a difference between Earned Value and Actual Cost
CV = EV - AC |
C | Schedule Variance equals a difference between Earned Value and Present Value
CV = EV - PV |
D | Schedule Variance is a quotient of Earned Value on Actual Cost
CV = EV / AC |
Question 6 Explanation:
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]
Question 7 |
The schedule variance (SV) of your project shows that the project is likely to have a schedule overrun. You know this because the budget is much:
A | Lower than the actual cost (AC). |
B | Higher than the value of Earned Value (EV). |
C | Lower than the Earned Value (EV). |
D | Higher than the actual cost (AC). |
Question 7 Explanation:
If the budget is higher than the Earned Value, more work is scheduled than has been completed. Therefore, the Schedule Variance SV is negative.
Question 8 |
What does the Basis of Estimates explain?
A | All answers are right. |
B | Indication of the confidence level of the estimate. |
C | How the estimates were developed, documentation on all assumptions and constrains. |
D | All units, references and ranges of estimate. |
Question 8 Explanation:
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]
Question 9 |
A company's analysis and decision to purchase a product or service instead of producing the service or product itself is called _____.
A | Cost accounting. |
B | Variable costing. |
C | Life cycle costing. |
D | Make-or-buy decision. |
Question 9 Explanation:
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.
Question 10 |
A project manager is working with scope baseline, project schedule human resources plan and risk register. What process the project manager performs?
A | Estimate resource requirements. |
B | Create WBS and WBS dictionary. |
C | Develop schedule. |
D | Estimate costs. |
Question 10 Explanation:
Along with enterprise environmental factors and organizational process assets, all these are inputs to Estimate Costs process.
[1 - 7.1 Estimate Costs]
Question 11 |
Which process monitors the status of the project and keeps updated the information about the project budget and manages changes to the cost baseline?
A | Estimate costs. |
B | Control costs. |
C | Determine Budget. |
D | Control account. |
Question 11 Explanation:
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]
Question 12 |
How 0/100 Rule is used for project reporting?
A | Status of an activity is judged by completeness of 50% of the work. |
B | Status of an activity is judged for its 20% and then 80% of completeness. |
C | Status of an activity is judged by completeness of 100% of the work. |
D | Status of an activity is judged for each half (50%) of completeness. |
Question 12 Explanation:
Status of an activity is judged for its 20% and then 100% of completeness.
[1 - 7.2 Determine Budget]
Question 13 |
What is the Planned Value (performance measurement baseline or total planned value - Budget at Completion)?
A | Current estimate of authorized budget assigned to complete the work. |
B | The allocated amount of money, plus management reserves. |
C | A budget that left after the work is complete. |
D | The allocated amount of money, plus contingency reserves and management reserves. |
Question 13 Explanation:
Planned value (budget) that authorized assigned to complete the work.
[1 - 7.3.2 Control Costs: Tools and Techniques]
Question 14 |
What disadvantages of the analogous estimating?
A | Risk to gain bigger estimation without justification. |
B | All choices are right. |
C | May required considerable experience for complete, especially for cases with uncertainty. |
D | Counts only similarities, not differences in the comparing projects. |
Question 14 Explanation:
All choices are right.
[1 - 7.1.2 Estimate Cost:s: Tools and Techniques]
Question 15 |
What advantages brings the analogous estimating?
A | Gives an analogous estimation to overall project cost. |
B | Easier to faster to create. |
C | All choices are right. |
D | Provides a reference to a level of the management\s and stakeholder's expectations, similarly as with another project. |
Question 15 Explanation:
All choices are right.
[1 - 7.1.2 Estimate Cost:s: Tools and Techniques]
Question 16 |
Earned Value (EV) means _____.
A | What is the value of completed work. |
B | How much money earned. |
C | How much time is spent. |
D | How much finds are spent. |
Question 16 Explanation:
Earned Value (EV) means how much work is done.
[1 - 7.3.2 Control Costs: Tools and Techniques]
Question 17 |
What is the planned value?
A | An authorized budget assigned to complete the work. |
B | The allocated amount of money, plus contingency reserves and management reserves. |
C | A planned budget assigned to complete the work. |
D | The allocated amount of money, plus management reserves. |
Question 17 Explanation:
planned value is an authorized budget assigned to complete the work.
[1 - 7.3.2 Control Costs: Tools and Techniques]
Question 18 |
Who is responsible for realistic and accurate estimation of the project?
A | Project sponsor. |
B | Project manager. |
C | Stakeholders. |
D | Project team. |
Question 18 Explanation:
Project manager is responsible for realistic and accurate estimations, and maintain their integrity throughout the project.
[1 - 7.1 Estimate Costs]
Question 19 |
Output of which process the quantitative assessment of probable costs is?
A | Estimate cost of resources. |
B | Estimate quality costs. |
C | Estimate resources requirements. |
D | Estimate costs. |
Question 19 Explanation:
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]
Question 20 |
While determining budget a project manager uses _____ processes.
A | Executing. |
B | Communication. |
C | Planning. |
D | Controlling. |
Question 20 Explanation:
Determine Budget is one of the processes of planning process group.
[1 - 7. Project Cost Management]
Question 21 |
What of the following describes the required level of accuracy in cost estimates, control thresholds, and rules of performance measurement.
A | Control account plan. |
B | Work performance plan. |
C | Cost management plan. |
D | Cost management processes. |
Question 21 Explanation:
Cost management plan describes the level of accuracy of cost estimates, control thresholds and rules of performance measurement.
[1 - 7. Project Cost Management]
Question 22 |
What set of tools and techniques can be used for estimating costs?
A | Same as used to estimate scope. |
B | Same as used to estimate time. |
C | Same as used to estimate risk. |
D | Same as used to estimate resource requirements. |
Question 22 Explanation:
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]
Question 23 |
A project management team is working on the reduction of project overall cost without changing scope. What of the following techniques would be suitable for this efforts?
A | Delphi method. |
B | Monte Carlo method. |
C | Value analysis. |
D | Cost control. |
Question 23 Explanation:
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]
Question 24 |
Cost Variance (CV) is a difference between Earned Value (EV) and _____.
A | Budget at Completion (BAC) |
B | Estimate at Completion (EAC) |
C | Actual Cost (AC) |
D | Present Value (PV) |
Question 24 Explanation:
Cost Variance (CV) is a difference between Earned Value (EV) and Actual Cost (AC).
[1 - 7.3.2 Control Costs: Tools and Techniques]
Question 25 |
While selecting a project, what of the following financial factors are important?
A | After implementation costs. |
B | Project costs and after implementation costs. |
C | Feasibility of stakeholders' expectations. |
D | Sponsor's constrains. |
Question 25 Explanation:
Project costs and after implementation costs, both needs to be considered during project selection process.
[1 - 7. Project Cost Management]
Question 26 |
The project has the following numbers: Revenue $2,400,000; Salaries 1,100,000; Sale Commissions: $180,000; Cost of Equipment $280,000; Cost of Software Licenses $120,000; Cost of Advertising $90,000; Travel by Sales and Marketing staff $80,000; Import and Export duties: $30,000. What is net income of the project?
A | $630,000 |
B | $920,000 |
C | $520,000 |
D | $810,000 |
Question 26 Explanation:
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.
Question 27 |
What disadvantages of the bottom-up estimating?
A | Requires deep understanding and detailed breakdown of the project. |
B | Padding may happen because of complexity of the work, if no reserve was considered. |
C | This is one of the most expensive types of estimation because of it detailed level. |
D | All choices are right. |
Question 27 Explanation:
All choices are right.
[1 - 7.1.2 Estimate Cost:s: Tools and Techniques]
Question 28 |
What advantages creates the bottom-up estimating?
A | All choices are right. |
B | Obtains buy-in from the team and stakeholders. |
C | Provides detailed references for monitoring and controlling, performance management, and management. |
D | Provides more accurate estimation that based on detailed analysis. |
Question 28 Explanation:
All choices are right.
[1 - 7.1.2 Estimate Cost:s: Tools and Techniques]
Question 29 |
What earned value management is?
A | Project management technique for measuring project performance and progress in an object manner. |
B | Financial method to identify project performance by measuring actual costs against planned costs. |
C | Management methodology for measuring the expense again planned values to identify project progress in an object manner. |
D | Project management techniques for measuring of spent costs and time to identify project performance in an object manner. |
Question 29 Explanation:
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]
Question 30 |
What process may help keeping estimations realistic through whole project?
A | Periodic re-estimation. |
B | Supporting changes. |
C | Constant process improvement. |
D | Applying preventive actions. |
Question 30 Explanation:
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]
Question 31 |
Which of the following sources provides estimate costs with human resource plan?
A | Cost estimate. |
B | Risk register. |
C | Scope statement. |
D | Develop human resource plan. |
Question 31 Explanation:
Human Resource Plan feeds Estimate Costs, but produced by Develop Human Resource Plan process.
[1 - 7.1 Estimate Costs]
Question 32 |
How to calculate Variance at Completion (VAC)?
A | Variance at Completion is a difference between Budget at Completion and Estimation at Completion
VAC = BAC - EAC |
B | A quotient of the remaining work to residual of money.
(BAC - EV) / (BAC - AC) |
C | A difference between Earned Value and Present Value
CV = EV - PV |
D | A quotient of Earned Value on Actual Cost
CV = EV / AC |
Question 32 Explanation:
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]
Question 33 |
How 50/50 Rule is used for project reporting?
A | Status of an activity is judged by completeness of 50% of the work. |
B | Status of an activity is judged for 100% completed work. |
C | Status of an activity is judged by each 20% (20x5=100%) of completeness. |
D | Status of an activity is judged for each half (50%) of completeness. |
Question 33 Explanation:
Status of an activity is judged for each half (50%) of completeness.
[1 - 7.2 Determine Budget]
Question 34 |
What measurements earned value management integrates?
A | Scope, cost, schedule, and procurement measures. |
B | Scope, cost, schedule, and risks measures. |
C | Scope, cost, schedule, and communications measures. |
D | Scope, cost, and schedule measures. |
Question 34 Explanation:
Earned Value Management integrates Scope, Cost, and Schedule measures.
[1 - 7.3.2 Control Costs: Tools and Techniques]
Question 35 |
What is the purpose of project cost management?
A | Providing structured reporting about project status. |
B | Complete project within approved budget. |
C | Provide structured control account for project budget. |
D | Ensure that project progress is on budget. |
Question 35 Explanation:
Complete project within approved budget is the right answer.
[1 - 7. Project Cost Management]
Question 36 |
What action should try first for decreasing estimation of cost and/or time?
A | Reasonable cut of project scope. |
B | Increasing time and budget. |
C | Reducing or eliminating the risks. |
D | Increasing thresholds tolerance. |
Question 36 Explanation:
Reducing or eliminating the risks may decrease estimation.
[1 - 7.1 Estimate Cost]
Question 37 |
How 20/80 Rule is used for project reporting?
A | Status of an activity is judged for its 20% and then 80% of completeness. |
B | Status of an activity is judged for each half (50%) of completeness. |
C | Status of an activity is judged by each 20% (20x5=100%) of completeness. |
D | Status of an activity is judged by completeness of 50% of the work. |
Question 37 Explanation:
Status of an activity is judged for its 20% and then 80% of completeness.
[1 - 7.2 Determine Budget]
Question 38 |
What is the process by which the cost of an asset is written off over the life of the asset?
A | Recision |
B | Depreciation |
C | Matriculation |
D | Amortization |
Question 38 Explanation:
Depreciation is, for example, when the cost of a computer is written off over a 3-year period.
Question 39 |
What tools and techniques are used to determine budget?
A | All choices are right. |
B | Funding limit reconciliation. |
C | Cost aggregation and reserve analysis. |
D | Expert judgement and historical relationships. |
Question 39 Explanation:
All choices are right.
[1 - 7.2 Determine Budget]
Question 40 |
The CPI of the project is 1.23, the SPI is 07, the SV is -90,000, and the PV is $550,000. How to find Cost Variance on the project?
A | 147,200 |
B | -105,800 |
C | -104,600 |
D | 146,300 |
Question 40 Explanation:
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
Question 41 |
What project manager should concern about when receives estimates?
A | Time and cost thresholds. |
B | Assumptions and constrains. |
C | Padding and risks. |
D | Costs of efforts rather than duration. |
Question 41 Explanation:
Estimates should be checked for padding and risks.
[1 - 7.1 Estimate Costs]
Question 42 |
How to calculate Cost Variance (CV)?
A | Cost Variance equals a difference between Earned Value and Present Value
CV = EV - PV |
B | Cost Variance is a quotient of Earned Value on Actual Cost
CV = EV / AC |
C | Cost Variance equals a difference between Earned Value and Actual Cost
CV = EV - AC |
D | Cost Variance is a quotient of Earned Value on Present Value
CV = EV / PV |
Question 42 Explanation:
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]
Question 43 |
Which estimation is more accurate?
A | Definitive estimate. |
B | Budget estimate. |
C | Rough order of magnitude. |
D | Estimate of external design. |
Question 43 Explanation:
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]
Question 44 |
During project execution, a project manager performs control costs. What process group is used?
A | Monitoring an controlling. |
B | Initiating. |
C | Planning. |
D | Executing. |
Question 44 Explanation:
Control Costs is a part of Monitoring an Controlling process Group.
[1 - 7. Project Cost Management]
Question 45 |
What is actual cost (total cost) (AC)?
A | Cost of the work to complete the work. |
B | A planned budget assigned to complete the work. |
C | Current estimated and authorized budget assigned to complete the work. |
D | The total cost of accomplished work at its current stage. |
Question 45 Explanation:
The total cost of accomplished work at its current stage.
[1 - 7.3.2 Control Costs: Tools and Techniques]
Question 46 |
Who takes cost risk on fixed-price contracts?
A | Equally both vendor and buyer. |
B | Vendor. |
C | Buyer. |
D | User. |
Question 46 Explanation:
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]
Question 47 |
What aggregated parts included in estimated budget?
A | Cost Baseline and management reserves. |
B | Project estimate and contingency reserves. |
C | Project estimate and management reserves. |
D | Control account estimate, contingency, and management reserves. |
Question 47 Explanation:
The hierarchy of estimated budget is the following: Activity, Work Package, Control Account, Project, Contingency, Cost Baseline, Cost Budget.
[1 - 7.2 Determine Budget]
Question 48 |
Your project data shows that the budget is 300, the value of work accomplished is 180, and the actual cost (AC) is 220. What is the efficiency?
A | 0.6 |
B | 1.22 |
C | 0.81 |
D | 0.73 |
Question 48 Explanation:
The efficiency is Earned Value (EV) divided by Actual cost (AC). In this case, Efficiency = 180 / 220 = 0.81.
Question 49 |
At the start of a project, the Budget at Completion (BAC) and the Project Budget have the same values.
A | True. |
B | These terms are not related. |
C | False. |
D | These are the same terms. |
Question 49 Explanation:
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).
Question 50 |
How to calculate Cost Performance Index (CPI)?
A | Cost Performance Index equals a difference between Earned Value and Actual Cost
CV = EV - AC |
B | Cost Performance Index is a quotient of Earned Value on Present Value
CV = EV / PV |
C | Cost Performance Index is a quotient of Earned Value on Actual Cost
CV = EV / AC |
D | Cost Performance Index equals a difference between Earned Value and Present Value
CV = EV - PV |
Question 50 Explanation:
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]
Question 51 |
A project manager did good work and prepared an accurate work breakdown structure. What type of techniques is used for detailed estimating of an available activities or work package, which then rolled up into control accounts and after into overall project estimate?
A | Parametric estimating. |
B | Analogous estimating. |
C | Bottom-up estimating. |
D | Top-down estimating. |
Question 51 Explanation:
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]
Question 52 |
What of the following documents are needed to Estimate Costs based on scope baseline with acceptance criteria, key deliverables, project boundaries, assumptions and constrains, as well as the detailed relations between all components of the project and project deliverables?
A | Scope statement and project schedule. |
B | Project scope statement and resource estimate. |
C | Project scope and activity cost estimate. |
D | Scope statement and work breakdown structure. |
Question 52 Explanation:
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]
Question 53 |
A project manager uses parametric and analogous methods for estimating the cost. In what type of processes he is currently involved?
A | Executing. |
B | Planning. |
C | Control cost. |
D | Cost management. |
Question 53 Explanation:
Project manager is doing planning.
[1 - 7. Project Cost Management]
Question 54 |
A project manager concerns about increasing of productivity and saving money. What of the following may help in estimating costs process?
A | Human resources plan. |
B | Policies on estimating, processes, templates, company culture and existing systems. |
C | Scope baseline. |
D | Project schedule. |
Question 54 Explanation:
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]
Question 55 |
The project budget _____.
A | There is always deviation between budget and actual cost, what needs to be corrected through the change management. |
B | Never change. |
C | Is changing no matter what. |
D | Can change through the change management process. |
Question 55 Explanation:
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.
Question 56 |
What criterion influences the project costs and after implementation product maintenance costs?
A | Unknown risks. |
B | Allocated budget. |
C | Project duration. |
D | Quality. |
Question 56 Explanation:
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]
Question 57 |
Which document provides estimating cost process with the details about the estimating subject?
A | Scope baseline. |
B | All choices are right. |
C | Project schedule. |
D | Human resources plan. |
Question 57 Explanation:
Scope baseline provides cost estimating process with the details about estimating subject.
[1 - 7.1.1 Estimate Cost:s Inputs]
Question 58 |
How to calculate Estimate At Completion (EAC)?
A | Actual cost plus difference between Budget at Completion (BAC) and Earned Value.
EAC = AC + (BAC - EV) |
B | Actual cost plus is a quotient of Budget at Completion to Cost Performance Index.
EAC = BAC / Cumulative CPI |
C | Actual cost plus estimate for the remaining work.
EAC = AC + ETC |
D | All choices are right. |
Question 58 Explanation:
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]
Question 59 |
Which output of the estimating costs process explains the approach of applied estimating method?
A | Activity costs estimates. |
B | Procurement plan. |
C | Basis of Estimates. |
D | Estimation management plan. |
Question 59 Explanation:
Basis of Estimates explains the applied approach of the estimate.
[1 - 7.1.3 Estimate Costs: Output]
Question 60 |
Which of the following terms refers to amount of money required to create a product and put it on the shelf ready for sale?
A | Budget to Complete. |
B | Expense. |
C | Costs. |
D | Revenue. |
Question 60 Explanation:
* Costs are the all expenditures to complete the project and get a product or service ready for sale.
Question 61 |
Why the cost of quality should be added to project costs?
A | Such costs should be assumed in the project charter. |
B | Because the cost of quality is a contingency part of budget. |
C | Because the cost of quality if a part of management reserve. |
D | It may take considerable time and efforts to provided accurate estimation. |
Question 61 Explanation:
An accurate estimation may take considerable time, efforts, and costs to provide accurate estimation.
[1 - 7.1.2 Estimate Cost:s: Tools and Techniques]
Question 62 |
Which estimation is more accurate?
A | Estimate of external design. |
B | Rough order of magnitude. |
C | Definitive estimate. |
D | Budget estimate. |
Question 62 Explanation:
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]
Question 63 |
What parts of the estimated budget are included to cost baseline?
A | Project estimate, contingency reserves, and management reserves. |
B | Project estimate and management reserves. |
C | Project estimate and contingency reserves. |
D | Control account estimate, contingency, and management reserves. |
Question 63 Explanation:
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]
Question 64 |
How the vendor's estimation may help project performing organization in estimating costs?
A | Assumption of the costs for outsourced project cannot be used because it includes planned profit of the seller. |
B | It gives a reference to the costs that associated with the outsources project. This can be used for calculating the internal costs. |
C | Cannot be used because the seller has different enterprise environmental factors and organizational process assets. |
D | The outsourced estimation is the most accurate because it presents an existing project team. |
Question 64 Explanation:
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]
Question 65 |
Which of the following sources provides estimate costs with project schedule?
A | Scope statement. |
B | Develop schedule. |
C | Risk register. |
D | Cost estimate. |
Question 65 Explanation:
Project Schedule feeds Estimate Costs, but produced by Develop Schedule process.
[1 - 7.1 Estimate Cost]
Question 66 |
Your project has a cost of $280,000, an expense of $170,000 and a markup of 1.35. What is the revenue?
A | $148.5 |
B | $548 |
C | $607.5 |
D | $509.5 |
Question 66 Explanation:
The correct answer is now shown. Revenue = (Cost + Expense) x Markup.
Question 67 |
What level of accuracy provides +/-50% from actual cost?
A | Budget estimate. |
B | Definitive estimate. |
C | Rough order of magnitude. |
D | Estimate of internal design. |
Question 67 Explanation:
Rough order of magnitude is the right answer.
[1 - 7.1.2 Estimate Cost:s: Tools and Techniques]
Question 68 |
What parts of the estimated budget included to control account?
A | Contingency and management reserves. |
B | Cost baseline, plus management reserves. |
C | Activities and work packages. |
D | Project estimate, contingency estimate. |
Question 68 Explanation:
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]
Question 69 |
Which process develops an approximation of the monetary resources needed to complete project activities?
A | Control costs. |
B | Determine Budget. |
C | Control account. |
D | Estimate costs. |
Question 69 Explanation:
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]
Question 70 |
How to calculate Estimation to Complete (ETC)?
A | Estimation to Complete is a difference between Estimation at Completion and Actual Cost.
ETC = EAC - AC |
B | A difference between Earned Value and Present Value
CV = EV - PV |
C | A quotient of Earned Value on Actual Cost
CV = EV / AC |
D | A quotient of the remaining work to residual of money.
(BAC - EV) / (BAC - AC) |
Question 70 Explanation:
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.
Question 71 |
What cost types should be estimated?
A | Fixed. |
B | All choices are right. |
C | Direct and indirect. |
D | Variable. |
Question 71 Explanation:
All choices are right.
[1 - 7.1 Estimate Costs]
Question 72 |
How to calculate Schedule Performance Index (SPI)?
A | Schedule Performance Index is a quotient of Earned Value on Actual Cost
CV = EV / AC |
B | Schedule Performance Index is a quotient of Earned Value on Present Value
CV = EV / PV |
C | Schedule Performance Index equals a difference between Earned Value and Present Value
CV = EV - PV |
D | Schedule Performance Index equals a difference between Earned Value and Actual Cost
CV = EV - AC |
Question 72 Explanation:
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]
Question 73 |
A project manager is working on determining budget of the project. What of the following information is missing?
A | Activity cost estimates, basis of estimates, basis of estimates, scope baseline. |
B | Project schedule, resources calendars. |
C | All choices are right. |
D | Contracts, organizational process assets. |
Question 73 Explanation:
All choices are right. All the listed here documents are input to the Determine Budget process.
[1 - 7.2 Determine Budget]
Question 74 |
During the application development a project manager performs control costs. What process group is used?
A | Initiating. |
B | Monitoring an controlling. |
C | Executing. |
D | Planning. |
Question 74 Explanation:
Control Costs is a part of Monitoring an Controlling process Group.
[1 - 7. Project Cost Management]
Question 75 |
What describes the format and sets the criteria for planning, structuring, estimating, budgeting, and controlling project costs?
A | Cost management plan. |
B | Work performance plan. |
C | Cost management processes. |
D | Control account plan. |
Question 75 Explanation:
Cost management plan describes the format and sets the criteria for planning, structuring, estimating, budgeting, and controlling project costs.
[1 - 7. Project Cost Management]
Question 76 |
Which process aggregates the estimated expenses for work items to determine an authorized cost baseline?
A | Create control account. |
B | Determine Budget. |
C | Perform control costs. |
D | Estimate costs. |
Question 76 Explanation:
Determine Budget is the process that aggregates the estimated costs of work items to determine an authorized cost baseline.
[1 - 7. Project Cost Management]
Question 77 |
The project sponsor determined a cost constrain that does not seem to cover the project's objectives. What project manager needs to do to provide realistic project plan?
A | Let the sponsor know about the risk and continue project while budget is available. |
B | Analyze the scope and requirements and come up with options to cut scope or reduce quality. |
C | Not to engage the project. |
D | Ask other project manager for advise. |
Question 77 Explanation:
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]
Question 78 |
Which document provides estimating cost process with information about the activities, type and quantity of resources?
A | Scope baseline. |
B | Project management costs. |
C | Project schedule. |
D | Risk register.. |
Question 78 Explanation:
Project schedule provides costs estimating with information about the activities, type and quantity of resources.
[1 - 7.1.1 Estimate Cost:s Inputs]
Question 79 |
The project has the following numbers: Revenue $2,400,000; Salaries 1,100,000; Sale Commissions: $180,000; Cost of Equipment $280,000; Cost of Software Licenses $120,000; Cost of Advertising $90,000; Travel by Sales and Marketing staff $80,000; Import and Export duties: $30,000. What is the Gross Profit of the Project?
A | $720,000 |
B | $810,000 |
C | $1,020,000 |
D | $900,000 |
Question 79 Explanation:
Gross profit = $2,400,000 revenue - ($1,100,000 salaries + $280,000 equipment + $120,000 software licenses) = $900,000.
Question 80 |
Amount that vendor received for conducting a project called _____.
A | Expense. |
B | Revenue. |
C | Net income. |
D | Gross Profit. |
Question 80 Explanation:
Revenue is the total amount of funds a vendor receives for its product or service.
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