Cost Control Calculation Basics Flashcards
define “total project cost”
all costs specific to a project, from initiating to completion
define “expenditure tracking and reporting”
helps PM to evaluate a project’s financial status
define “planned value”
the approved budget assigned to the work to be completed during a given time period
defined “earned value”
the value of the work completed to date compared to the budget
define “actual cost”
money actually expended during a given time period for completed work
define “cost baseline”
the approved project budget
define “schedule variance”
compares an activity’s actual progress to date to the estimated progress, represented in terms of cost
define “cost variance”
measures the actual performance to date against what’s been spent
define “cost performance index”
measures the value of the work completed at the measurement date against the actual cost
define “schedule performance index”
measures the progress to date against the progress that was planned
How would you describe a situation in which a calculated CV had a negative value?
costs were higher than planned
more was spent than planned
budget deficit
How would you describe a situation in which a calculated CV had a positive value?
cost were lower than planned
less was spent than planned
budget surplus
How would you describe a situation in which a calculated SV had a negative value?
the project is behind schedule
How would you describe a situation in which a calculated SV had a positive value?
the project is ahead of schedule
How would you describe a situation in which a calculated SPI was < 1 ?
the project is behind schedule
How would you describe a situation in which a calculated CPI was < 1 ?
the project is over budget
the project is earning less money than it is spending
How would you describe a situation in which a calculated CPI was > 1 ?
the project is over budget
the project is earning more money than it is spending
What are two methods to calculate burn rate?
- inverse of CPI ( 1 /CPI )
- AC/EV
You calculate a burn rate with a value < 1. What does that imply?
You are spending money slower than planned, and will complete the project within budget
You calculate a burn rate with a value > 1. What does that imply?
You are spending money faster than planned; at this rate, you will exhaust the budget before the project is complete
define “estimate at completion”
used in cost forecasting to describe the forecasted cost of the project from initiation
define “estimate to completion”
used in cost forecasting to forecast how much more money will need to be spent to reach completion
