Cost Management

Question 1

Plan Cost Management PROCESS

Answer 1

Defines how the team will manage the money
Defining the rules which are used to manage project costs

Question 2

Estimate Costs PROCESS

Answer 2

It is an inquiry into how much it
will cost to have the specified resources complete the
desired tasks or activities necessary to produce the
specified work packages

Question 3

Determine Budget PROCESS

Answer 3

Aggregating the cost estimates into a single project budget, but then spreading over time to generate the cost baseline

Question 4

Control Cost PROCESS

Answer 4

Keeping the project on budget
Comparing Planned work (PM Plan) against actual work (Work Performance data)

Question 5

Cost Management

Answer 5

Main goal is to create the cost baseline(Project budget) and ensuring the project stays on budget

Question 6

Life Cycle Costing

Answer 6

Product or service is examined to determine the cost of the project and cost associated with operating and disposing

after the project cost

Question 7

Opportunity Cost

Answer 7

Determined by the values of the next highest alternative

Question 8

Sunk Cost

Answer 8

Monies that have been already spent

Question 9

Value Analysis or Value Engineering

Answer 9

Find a less costly way to do the same work

Question 10

Enterprise Environmental Factors

Answer 10

A cost Input
Items such as org culture and structure, resource availability and skills, and commercial info.

Question 11

Are price and cost the same thing?

Answer 11

No
Price is = to cost +Profit

Question 12

Organizational Process Assets

Answer 12

Any policies, procedures, and or templates you might have that would aid in the costing of the project

Question 13

CQQ

Answer 13

Cost of Quality

Question 14

Cost Baseline

Answer 14

Basis of cost Comparison for the rest of the project

Question 15

Parametric Estimating

Answer 15

Often referred to as mathematical modeling
Uses a series of variables to calculate project estimate
As long as all of the major variables have been addressed, the estimate will be accurate.

Question 16

Bottom Up Estimating

Answer 16

Provides the most accurate estimates
PM Starts at 0, the bottom, and accounts for each cost within the project

Question 17

Rough Order of Magnitude

Answer 17

The rough order of magnitude is the least accurate approach, since it may vary from -25 percent to +75 percent.

Question 18

Reserve analysis

Answer 18

the process of determining how much reserve is
required.

Question 19

Alternatives analysis

Answer 19

examining the potential
different ways the team could execute the project and then calculating
the different durations to find the best outcome.

Question 20

Contingency Reserves

Answer 20

These represent reserves
controlled by the project manager and they are to be used for
know unknowns. This means the project manager and team
can plan for an event that they see as possible

Question 21

Management Reserves

Answer 21

These represent reserves
controlled by the project sponsor or the senior management.
They cannot be accessed without their permission.
Management reserves are used to respond to unknown
unknowns. These are events that cannot be planned for

Question 22

cost aggregation

Answer 22

rolling up activity cost into work packages and then work packages into deliverables
Knowing cost of deliverables will give u cost of the entire project

Question 23

Historical Information Review

Answer 23

a form of parametric estimating

Ex:using data from similar previous projects to estimate costs for this project

Question 24

Funding Limit Reconcilation

Answer 24

When org limits funding because of year end budgets

Question 25

Cost Baseline AKA BAC(Budget as completion)

Answer 25

Cost of the project Includes all cost of the deliverables This is included in Project Mgmt Plan Will be used to measure the performance of the proj

Question 26

Project Funding Requirements

Answer 26

States how and when the project will be funded Might also state how much is needed every quarter

Question 27

TO COMPLETE PERFORMANCE INDEX - TCPI

Answer 27

How we measure the level of work that needs to be done to finish the project within budget

Question 28

Cost Forecast

Answer 28

How much the project should cost at the end Based on rate of spending now

Question 29

Schedule Variance

Answer 29

Difference between the amount of work that should be done and what was actually done SC=EV-PV

Question 30

Schedule Performance Index (SPI)

Answer 30

1 or above means you are ahead of schedule

Question 31

Cost Performance Index (CPI)

Answer 31

Earned Value (EV) / (AC) Actual Cost Rate of how we are spending to what we are actually earning on the project

Question 32

Estimate at Completion (EAC)

Answer 32

Forecasting the total cost of the project at the end based on the current spending rate

Question 33

Cost Baseline

Answer 33

Includes all of the cost that are aggregated to the work pacakges ...Represents project costs including contingency reserves

Question 34

EARNED VALUE (EC)=

Answer 34

ACTUAL % COMPLETE * BUDGET AT COMPLETION (BAC)

Question 35

ESTIMATE TO COMPLETION (ETC) =

Answer 35

EAC(ESTIMATE AT COMPLETION) -ACTUAL COST AC

Question 36

CPI

Answer 36

cpi at 1 and above mean cost is under budget