Welcome to the Cost Management Questions for PMP examination. These questions here have been collected from various sources. Please check the sources given with each of the question for any further information. The answers are given at the bottom of the page
Ques. 1.
On a dam construction project, the SPI is 0.96. The project manager has decided to crash the schedule so that the SPI can improve. Which tool will help him find out if crashing has really helped the project in long run?
A. Earned Value Analysis
B. Performance Reviews
C. Cost-Benefit Analysis
D. S Curve
Source
On a dam construction project, the SPI is 0.96. The project manager has decided to crash the schedule so that the SPI can improve. Which tool will help him find out if crashing has really helped the project in long run?
A. Earned Value Analysis
B. Performance Reviews
C. Cost-Benefit Analysis
D. S Curve
Source
Ques. 2.
A Project Manager gets some additional budget from the management reserve to meet an unknown-unknown scope of work. What should he/she do first?.
A. Add that additional budget to the CR.
B. Spend that additional budget for the intended unknown-unknown work immediately.
C. Add it to cost baseline thru a Change Request, revise the cost baseline, and then spend.
D. Inform the Customer that this is scope creep and hence this additional work can not be done.
Source
A Project Manager gets some additional budget from the management reserve to meet an unknown-unknown scope of work. What should he/she do first?.
A. Add that additional budget to the CR.
B. Spend that additional budget for the intended unknown-unknown work immediately.
C. Add it to cost baseline thru a Change Request, revise the cost baseline, and then spend.
D. Inform the Customer that this is scope creep and hence this additional work can not be done.
Source
PMP Questions according to Knowledge Area
Ques. 3.
Your Vice President has asked you what the Estimate at Completion is going to be for a small project you are working on. You were given a budget of $30,000, and to date you have spent $20,000 but only completed $10,000 worth of work. You are sure that the future work will be accomplished at the planned rate.
A. $40,000
B. $30,000
C. $60,000
D. $56,956
Source: PMP Exam Prep: Questions, Answers & Explanations, 2013 Edition by Christopher Scordo
Your Vice President has asked you what the Estimate at Completion is going to be for a small project you are working on. You were given a budget of $30,000, and to date you have spent $20,000 but only completed $10,000 worth of work. You are sure that the future work will be accomplished at the planned rate.
A. $40,000
B. $30,000
C. $60,000
D. $56,956
Source: PMP Exam Prep: Questions, Answers & Explanations, 2013 Edition by Christopher Scordo
Ques. 4.
You are a project manager of a project to automate the physical security system of a building. Though you had planned to complete the project with 30 days, the project has eventually been completed in 45 days. what is the SPI at the end of the project?
A. 0.67
B. 1.5
C. 1
D. (-) 15 days
Source
You are a project manager of a project to automate the physical security system of a building. Though you had planned to complete the project with 30 days, the project has eventually been completed in 45 days. what is the SPI at the end of the project?
A. 0.67
B. 1.5
C. 1
D. (-) 15 days
Source
Ques. 5.
A project was scheduled to be performed by 3 resource for four weeks, working throughout the project duration. During first week, only 2 resource were assigned, whereas during second week, 2 more resource joined in. At the end of second week, 60% of the value of the work had been completed. What is the CPI for this project at the end of second week?
A. 0.83
B. 1.2
C. 0.8
D. 1.66
Source
A project was scheduled to be performed by 3 resource for four weeks, working throughout the project duration. During first week, only 2 resource were assigned, whereas during second week, 2 more resource joined in. At the end of second week, 60% of the value of the work had been completed. What is the CPI for this project at the end of second week?
A. 0.83
B. 1.2
C. 0.8
D. 1.66
Source
Ques. 6.
The BAC of a project was estimated at $10000. After 50% work has been completed, it has been found that $6000 has been spent to complete the work till date, what is ETC?
A. 12000
B. 6000
C. 10000
D. 4000
Source
The BAC of a project was estimated at $10000. After 50% work has been completed, it has been found that $6000 has been spent to complete the work till date, what is ETC?
A. 12000
B. 6000
C. 10000
D. 4000
Source
Ques. 7.
Which of the following statements about contingency reserves is false?
A. A contingency reserve is a separately planned quantity used to allow for future situations which may be planned for only in part.
B. Contingency reserves may be set aside for known unknowns.
C. Contingency reserves may be set aside for unknown unknowns.
D. Contingency reserves are normally included in the project's cost and schedule baselines.
Source
Which of the following statements about contingency reserves is false?
A. A contingency reserve is a separately planned quantity used to allow for future situations which may be planned for only in part.
B. Contingency reserves may be set aside for known unknowns.
C. Contingency reserves may be set aside for unknown unknowns.
D. Contingency reserves are normally included in the project's cost and schedule baselines.
Source
Ques. 8.
Post mortem of Earned value analysis of a project showed the following data: SPI: 0.88 CPI: 1.00 What is this telling you?
A. The entire work of the project has been finished behind schedule and on budget.
B. The entire work of the project has been finished ahead of schedule and on budget.
C. The project has been terminated before completion. At that time it was behind schedule and on budget
D. The project has been terminated before completion. At that time it was ahead of schedule and on budget.
Source
Post mortem of Earned value analysis of a project showed the following data: SPI: 0.88 CPI: 1.00 What is this telling you?
A. The entire work of the project has been finished behind schedule and on budget.
B. The entire work of the project has been finished ahead of schedule and on budget.
C. The project has been terminated before completion. At that time it was behind schedule and on budget
D. The project has been terminated before completion. At that time it was ahead of schedule and on budget.
Source
Ques. 9.
A Project was estimated to cost 200,000 with a time line of 10 months. At the end of 2 month, the project manager reviews the project and finds that the project Earned Value is 40,000 and Actual Costs are 50,000. What is ETC:
A. 160,000
B. 210,000
C. 250,000
D. 200,000
Source
A Project was estimated to cost 200,000 with a time line of 10 months. At the end of 2 month, the project manager reviews the project and finds that the project Earned Value is 40,000 and Actual Costs are 50,000. What is ETC:
A. 160,000
B. 210,000
C. 250,000
D. 200,000
Source
Ques. 10.
You are the project manager, considering recommending a project that costs $520,000; expected inflows are $40,000 per quarter for the first two years and then $50,000 per quarter thereafter. What is the payback period?
A. 40 months
B. 38 months
C. 36 months
D. 41 months
Source
You are the project manager, considering recommending a project that costs $520,000; expected inflows are $40,000 per quarter for the first two years and then $50,000 per quarter thereafter. What is the payback period?
A. 40 months
B. 38 months
C. 36 months
D. 41 months
Source
Ques. 11.
You are performing earned value technique on your project. After budget approval, an additional and unexpected cost item has been identified, which made the project more expensive some weeks ago. The item has meanwhile been paid by the project team, and it is expected that for the remaining duration of the project, costs will be as budgeted. In this case, which is the best formula to calculate EaC (Estimate at Completion)?
A. EaC = BaC - CV
B. EaC = BaC / CPI
C. EaC = AC + BtC / CV
D. You can not compute the EaC
Source
You are performing earned value technique on your project. After budget approval, an additional and unexpected cost item has been identified, which made the project more expensive some weeks ago. The item has meanwhile been paid by the project team, and it is expected that for the remaining duration of the project, costs will be as budgeted. In this case, which is the best formula to calculate EaC (Estimate at Completion)?
A. EaC = BaC - CV
B. EaC = BaC / CPI
C. EaC = AC + BtC / CV
D. You can not compute the EaC
Source
Ques. 12.
At this point in the project your realize that the technical requirements were poorly defined. You are considering building a prototype. Based on the following information what can you determine? The cost to build the prototype is $100K. With a prototype there is a 70% probability the customer will accept the final product without rework. Without a prototype there is a 40% probability the customer will accept the final product without rework. The cost to rework the final product if we build a prototype first is $20K. The cost to rework the final product if we do not build a prototype is $200K.
What can you determine?
A. The expected monetary value to not prototype is $ 14,000 more expensive than to prototype
B. The expected monetary value to not prototype is $100,000 more expensive than to prototype
C. The expected monetary value to not prototype is $ $120,000 more expensive than to not prototype
D. The expected monetary value to prototype is $100,000 more expensive than to not prototype
Source
At this point in the project your realize that the technical requirements were poorly defined. You are considering building a prototype. Based on the following information what can you determine? The cost to build the prototype is $100K. With a prototype there is a 70% probability the customer will accept the final product without rework. Without a prototype there is a 40% probability the customer will accept the final product without rework. The cost to rework the final product if we build a prototype first is $20K. The cost to rework the final product if we do not build a prototype is $200K.
What can you determine?
A. The expected monetary value to not prototype is $ 14,000 more expensive than to prototype
B. The expected monetary value to not prototype is $100,000 more expensive than to prototype
C. The expected monetary value to not prototype is $ $120,000 more expensive than to not prototype
D. The expected monetary value to prototype is $100,000 more expensive than to not prototype
Source
Ques. 13.
The Cost Management Plan is an output of the Plan Cost Management process. This plan is then integrated with other project plans in which of these processes?
A. Develop Project Management Plan
B. Monitor and Control Project Work
C. Perform Integrated Change Control
D. Direct and Manage Project Work
Source
The Cost Management Plan is an output of the Plan Cost Management process. This plan is then integrated with other project plans in which of these processes?
A. Develop Project Management Plan
B. Monitor and Control Project Work
C. Perform Integrated Change Control
D. Direct and Manage Project Work
Source
Ques. 14.
Which of the following is not accurate about the initial phase of a project?
A. The cost associated at the beginning of the project is highest
B. Staffing levels are the highest at this stage
Source
Which of the following is not accurate about the initial phase of a project?
A. The cost associated at the beginning of the project is highest
B. Staffing levels are the highest at this stage
Source
Ques. 15.
You have received the following estimates for a complex activity that is critical to the success of your project. The most likely estimate is $40, the optimistic estimate is $36, and the pessimistic estimate is $54. Find expected activity cost and standard deviation of this activity?
A. $ 45, 9
B. $ 45, 3
C. $ 42 ,3
D. $ 42 ,9
Source
You have received the following estimates for a complex activity that is critical to the success of your project. The most likely estimate is $40, the optimistic estimate is $36, and the pessimistic estimate is $54. Find expected activity cost and standard deviation of this activity?
A. $ 45, 9
B. $ 45, 3
C. $ 42 ,3
D. $ 42 ,9
Source
Ques. 16.
You are the PM on a software development project. You were able to attract more skilled resources than you expected and have been able to consistently complete tasks under budget. Your approved project budget is $40,000. The earned value is $25,000 and actual costs are $21,000. What is your estimate to complete this project?
A: 8613
B: 12613
C: 15000
D: 33613
Source
You are the PM on a software development project. You were able to attract more skilled resources than you expected and have been able to consistently complete tasks under budget. Your approved project budget is $40,000. The earned value is $25,000 and actual costs are $21,000. What is your estimate to complete this project?
A: 8613
B: 12613
C: 15000
D: 33613
Source
Ques. 17.
You are reviewing the 3 month cumulative earned value progress report for a software development project. The indicators reflect an SPI of .87 and a CPI of .94. What is the more likely explanation for why this occurred?
A. The schedule has been "crashed" resulting in an increase to the budget.
B. At least one task has taken more time than expected.
C. Less experienced resources are being assigned to complete the project work to date.
D. The leasing of the server hardware was more expensive than expected.
Source
You are reviewing the 3 month cumulative earned value progress report for a software development project. The indicators reflect an SPI of .87 and a CPI of .94. What is the more likely explanation for why this occurred?
A. The schedule has been "crashed" resulting in an increase to the budget.
B. At least one task has taken more time than expected.
C. Less experienced resources are being assigned to complete the project work to date.
D. The leasing of the server hardware was more expensive than expected.
Source
Ques. 18.
Post-mortem analysis after scheduled finish date of a project shows a CPI of 0.8 and an SPI of 1.25. What is a plausible explanation for that?
A. The project was terminated early. At that time, it was over budget and ahead of schedule.
B. The project has produced additional deliverables which were originally not required.
C. The project has evidently been finished under budget and behind of schedule.
D. The project has evidently been finished over budget and ahead of schedule.
Source
Post-mortem analysis after scheduled finish date of a project shows a CPI of 0.8 and an SPI of 1.25. What is a plausible explanation for that?
A. The project was terminated early. At that time, it was over budget and ahead of schedule.
B. The project has produced additional deliverables which were originally not required.
C. The project has evidently been finished under budget and behind of schedule.
D. The project has evidently been finished over budget and ahead of schedule.
Source
Ques. 19.
As per PMBOK 5, one of the tools and techniques used in ‘Control Cost’ is
A. Reserve analysis
B. Expert judgement
C. Funding limit reconciliation
D. Cost aggregation
Source
As per PMBOK 5, one of the tools and techniques used in ‘Control Cost’ is
A. Reserve analysis
B. Expert judgement
C. Funding limit reconciliation
D. Cost aggregation
Source
Ques. 20.
You are in the canteen and you overhear two engineers arguing about Project Budget and Budget at Completion. One was of the opinion that both are the same. What will you as a project manager clarify to them?
A. Project Budget and Budget at Completion will always be the same
B. Project Budget and Budget at Completion are not the same
C. Project Budget does not include Management reserve
D. Funding requirements will always be equal to Budget at Completion
Source
You are in the canteen and you overhear two engineers arguing about Project Budget and Budget at Completion. One was of the opinion that both are the same. What will you as a project manager clarify to them?
A. Project Budget and Budget at Completion will always be the same
B. Project Budget and Budget at Completion are not the same
C. Project Budget does not include Management reserve
D. Funding requirements will always be equal to Budget at Completion
Source
Answers:
1: B
2: C
3: A
4: C
5: B
6: B
7: C
8: C
9: D
10: C
11: A
12: A
13: A
14: A
15: C
16: B
17: C
18: A
19: A
20: B
1: B
2: C
3: A
4: C
5: B
6: B
7: C
8: C
9: D
10: C
11: A
12: A
13: A
14: A
15: C
16: B
17: C
18: A
19: A
20: B
