Cost Quiz: Can You Master Budget, Estimates & Variance?

1. A project has spent $50,000 (AC), planned to spend $45,000 (PV), and earned $48,000 (EV). What is the Cost Performance Index?

0.96

1.07

1.11

0.94

2. What is the primary difference between contingency reserves and management reserves in Project Cost Management (Project+)?

Contingency covers known unknowns; management covers unknown unknowns

Contingency is for schedule delays; management is for cost overruns

Contingency is fixed; management is variable

Contingency is approved by the sponsor; management by the PM

Submit

4. Which process involves monitoring actual project costs against the cost baseline and managing changes?

Estimate Costs

Determine Budget

Control Costs

Plan Cost Management

Submit

7. The Budget at Completion (BAC) for a project is $200,000 with a current CPI of 0.90. What is the Estimate at Completion (EAC)?

$180,000

$222,222

$200,000

$190,000

8. Which tool helps identify cost drivers and their impact on overall project cost?

Trend analysis

Sensitivity analysis

Regression analysis

Forecasting analysis

9. Reserve analysis in cost management typically includes which two types of reserves?

Contingency reserves and management reserves

Fixed reserves and variable reserves

Planned reserves and unplanned reserves

Risk reserves and schedule reserves

10. What is the Estimate to Complete (ETC) formula when assuming past performance will continue?

(BAC - EV) ÷ CPI

BAC - EV

BAC + AC

(BAC - EV) × CPI

11. Which cost estimation technique uses historical data from similar past projects to predict current project costs?

Parametric estimation

Analogous estimation

Three-point estimation

Bottom-up estimation

12. Which of the following is NOT a component of the cost management plan?

Estimation methodology

Cost control procedures

Stakeholder engagement strategy

Accuracy levels and rounding rules

13. What does Cost Variance (CV) measure in earned value management?

The difference between planned and actual schedule

The difference between earned value and actual cost

The percentage of work completed

The forecasted cost at project completion

14. In three-point estimation, what formula is used to calculate the expected cost?

(Optimistic + Most Likely + Pessimistic) ÷ 2

(Optimistic + 4 × Most Likely + Pessimistic) ÷ 6

(Optimistic + Most Likely + Pessimistic) ÷ 3

(Most Likely + Pessimistic) ÷ 2

15. Which estimation technique divides the project into smaller components and estimates each separately?

Analogous estimation

Parametric estimation

Bottom-up estimation

Rough order of magnitude

16. What is the primary purpose of variance analysis in project cost management?

To assign resources to project activities

To identify and understand deviations from the cost baseline

To determine the total project budget

To create the work breakdown structure

17. A project has a Schedule Performance Index (SPI) of 1.2. What does this mean for project scheduling?

The project is 20% behind schedule

The project is 20% ahead of schedule

The project costs 20% more than planned

The project schedule variance is negative

18. Which document defines all approved project costs and serves as the baseline for cost control?

Cost management plan

Project charter

Cost baseline

Budget estimate

19. If a project has a Cost Performance Index (CPI) of 0.85, what does this indicate?

The project is 15% over budget

The project is 85% complete

The project is 15% under budget

The project costs 85% of the planned value

20. What does Earned Value (EV) represent in project cost management?

The actual cash spent on the project

The budgeted value of work actually performed

The total project budget at completion

The forecasted remaining project cost