Project Cost Management PMP Questions

Question No :1
Which one is best describes analogous estimating?
1. Less accurate
2. Regression analysis
3. Bottom up estimating
4. Regression analysis
correct is :1
Explanations :
Analogous estimating is less accurate than other estimating methods.
B is incorrect, as regression analysis is a type of parametric modeling.
C is incorrect,as bottom-up estimating starts with zero and adds up the project costs.
D is incorrect, as analogous estimating is not more accurate.


Question No :2
Your project has a budget of $12,000 and is expect to last 1 year, with the work and
budget spread evenly across all months. The project is now in month four, But till now total
spending for this project is $5,000.
What is Variance at Completion?
1. -$3,000
2. -$5,000
3. $12,000
4. $13,000
correct is :1
Explanations :
Earn Value = (Total Cost/total project months) * total months completed = ($12,000/12)*4=$4,000
Variance at Completion = BAC - EAC
CPI = EV (Earned Value) / AC (Actual Cost) = $4000/$5000 = .8
Estimate at Completion (EAC) = BAC/CPI = $12,000 / .8 = $15,00
Variance at Completion = $12,000 - $15,000 = -$3,000


Question No :3
Your project has a budget of $240,000 and is expect to last 1 year, with the work and
budget spread evenly across all months. The project is now in month four, the work is on
schedule, but you have spent $120,000 of the project budget. What is your COST variance
percentage?
1. -50%
2. 50%
3. 40%
4. None of the above
correct is :1
Explanations :
Cost Variance = Earn Value - Actual Cost
Earn Value = (Total Cost/total project months) * total months completed =
($240,000/12)*4=$80,000
CV = $80,000 - $120,000 = -$40,000
CV % = CV / EV = -$40,000/$80,000 = -50%


Question No :4
You are the project manager of the AC Installation Project for a new building. Your BAC is
$500,000. You have spent $270,000 of your budget. You are now 50 percent done with the
project, though your plan called for you to be
55 percent done with the work at this time. What is CPI?
1. .92
2. .82
3. .72
4. .22
correct is :1
Explanations :
CPI = EV / AC = Earned Value/ Actual Cost
The EV of $250,000 is divided by the AC of $270,000 for a value of .92.


Question No :5
If you want to print mote than 25000 workbooks, printing of workbooks may be go upto 50000
workbooks .For every 5000 workbooks created the cost is reduced a percentage of the original
printing cost. The workbook expense is an example of which one of the following?
1. Fixed costs
2. Parametric costs
3. Variable costs
4. None of the above
correct is :3
Explanations :
This is an example of variable costs.


Question No :6
If you are the project manager for a project. The customer has requested that you factor afterproject costs, such as maintenance and service.
This is an example of which one of the following?
1. Life cycle costs
2. Scope creep
3. Project spin off
4. Operations
correct is :1
Explanations :
The after-project costs are known as the life cycle costs.
Question No :7
Which estimating technique is most accurate?
1. Bottom-up estimating.
2. Analogous estimating.
3. Parametric modeling.
4. None of the above
correct is :1
Explanations :
Bottom-up estimating : Estimating the cost of individual work items and then rolling up the costs to
arrive at a project total . It is more accurate.


Question No :8
If You are the project manager for a Project. You are about to create the cost estimates for
the project. Which input to this process will help you most?
1. Work breakdown structure
2. Historical information
3. Scope statement
4. All of the above
correct is :1
Explanations :
Inputs helps you to estimate
a)Enterprise Environmental Factors
b)Organizational Process Assets
c)Project Scope Statement
d)Work breakdown structure
e)Historical information
f)Project Management Plan


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