Module 8 Cost Management Flashcards
The _________is the approved budget, usually in a time distribution format, that is used to estimate, monitor, and control the overall cost performance of the project.
A. cost benchmark
B. management baseline.
C. control account
D. cost baseline.
D. cost baseline.
All of the following factors must be in place in order to develop an analogous estimate effectively EXCEPT:
A. An organization must know details behind the time value of money
B. An organization must know how the proposed effort differs from the previous project.
C. An organization must have experience with the methods by which the proposed project will be performed.
D. An organization must know how much previous projects actually cost.
A. An organization must know details behind the time value of money
Projects often include indirect costs that are necessary to keep the organization running, but are not associated with one specific project. Which of the following items are most typically considered to be indirect costs?
A. executive salaries, utilities and insurance
B. the cost of labor provided by project team members, consultants and subcontractors
C. costs associated with material and purchased parts
D. travel cost for the project team
A. executive salaries, utilities and insurance
The cost management plan _______
A. establishes how the project costs will be planned, structured, and controlled.
B. allows for gold-platting.
C. does not include methods used or level of accuracy.
D. gives team members authority to spend.
A. establishes how the project costs will be planned, structured, and controlled.
Bringing in a consultant to assess productivity and optimize project life cycle costs would be an example of _____.
A. Value engineering
B. Activity-based costing
C. Vendor bid analysis
D. “Should-cost estimation”
A. Value engineering
Which estimating technique decomposes the work into lower, more detailed pieces, preferably the lowest level of WBS work elements, for which estimates are prepared and then aggregates them into a total quantity for the project?
A. grass roots estimating
B. bottom-up estimating
C. decomposition estimating
D. piece meal pricing
B. bottom-up estimating
A colleague is learning PMBOK terms. He is confused about which term he should use for the project manager to allocate funds for work (or risks) in his project. The term is:
A. Slush Fund
B. Contingency allocation for scoped work
C. A Delphi Reserve for scoped work
D. Management Reserve for non-scoped work
B. Contingency allocation for scoped work
Complex projects such as research and development for new products often employ rolling wave planning to estimate costs. Which of the following best describes “rolling wave” planning?
A. Project managers render an order of magnitude estimate for the first stage and a definitive estimate for the remainder of the project.
B. Project managers render an order of magnitude estimate for all stages of the project.
C. Project managers render a definitive estimate for the first stage and an order of magnitude estimate for the remainder of the project.
D. Project managers render definitive estimates for all stages of the project during initiation.
C. Project managers render a definitive estimate for the first stage and an order of magnitude estimate for the remainder of the project.
Which of the following is an example of a parametric measure:
A. Cost price management.
B. Learning curve.
C. Average cost from the Delphi method.
D. Dollars per square foot.
D. Dollars per square foot.
Which estimating technique uses a statistical relationship between historical data and other variables including rates (e.g., square footage in construction) to calculate an estimate for scope, cost and duration?
A. bottom-up estimating
B. analogous estimating
C. parametric estimating
D. Monte Carlo estimating
C. parametric estimating
All of the following items describe an aspect of life cycle costing EXCEPT:
A. Life cycle cost only includes the project cost from initiating through closing
B. Project managers may need to consider disposal costs of the product after its useful life is complete to calculate total life cycle cost.
C. Many project selection decisions are made based upon life cycle cost.
D. Life cycle cost includes the cost of both creating the project and of using the result of the project during its useful life.
A. Life cycle cost only includes the project cost from initiating through closing
____ costs are those necessary to keep an organization running, but are not associated with one specific project.
A. fixed
B. variable
C. direct
D. indirect
D. indirect
Which of the following terms best describes extra money in the project budget to be used if necessary - usually if an identified risk event occurs?
A. Management Reserve
B. Insurance
C. Contingency Reserve
D. Discretionary Fund
C. Contingency Reserve
The process of developing an approximation of the monetary resources needed to complete project work is known as:
A. Activity resourcing
B. Estimating personnel
C. Capital budgeting
D. Estimating cost
D. Estimating cost
When using the three-point estimate (PERT) you need to know P, O, and M, which stand for:
A. A Pessimistic, Optimistic, and Most likely estimate.
B. The Problem, Organization, and Motive.
C. The Project, Objective, and Mission.
D. A Practical, Optimistic, and Mode estimate.
A. A Pessimistic, Optimistic, and Most likely estimate.
