Planning: Cost Management

Question 1

The process of defining how the project costs will be estimated, budgeted, managed, monitored, and controlled

Answer 1

3.11 Plan Cost Management

Question 2

A component of a project or program management plan that describes how cost will be planned, structured, and controlled.

Answer 2

Cost Management Plan

Question 3

A technique used to evaluate identified options in order to select the options or approaches to use to execute and perform the work of the project.

Answer 3

Alternative Analysis

Question 4

A methodology that combines scope, schedule, and resource measurements to assess project performance and progress.

Answer 4

Earned Value Management

Question 5

The measure of work performed expressed in terms of the budget authorized for that work.

Answer 5

Earned Value (EV)

Question 6

The expected total cost of completing all work expressed as the sum of the actual cost to date and the estimate to complete.

Answer 6

Estimate at Completion (EAC)

Question 7

The expected cost to finish all the remaining project work.

Answer 7

Estimate to Complete (ETC)

Question 8

The process of developing an approximation of the monetary resources needed to complete project work.

Answer 8

3.12 Estimate Costs

Question 9

All costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraisal of the product or service for conformance to requirements, and failure to meet requirements.

Answer 9

Cost of Quality (CoQ)

Question 10

Techniques used to select a course of action from different alternatives.

Answer 10

Decision-Making Techniques

Question 11

Expenses that are not dependent on the level of goods or services produced by the business. They tend to be time-related, such as rents being paid per month.

Answer 11

Fixed costs

Question 12

Expenses that change in proportion to the activity of a business. When activity is decreased, less raw material is used, so spending for raw materials falls.

Answer 12

Variable costs

Question 13

A cost that can be directly related to producing specific goods or performing a specific service.

Ex: wages of an employee engaged in producing a product

Answer 13

Direct costs

Question 14

Costs that are not directly attributable to a particular project, such as heat and light (overhead).

Answer 14

Indirect costs

Question 15

-25% to +75%

initial cost estimate range of accuracy

typically used during Initiation when details are not yet developed

Answer 15

Rough Order of Magnitude

(Estimating terminology)

Question 16

-5% to +10%

Answer 16

Definitive Estimate

(Estimating terminology)

Question 17

Prevention and appraisal costs

Answer 17

Cost of Conformance

Question 18

Internal and external failure costs

Answer 18

Cost of Non-conformance

Question 19

Formula for BETA Distribution (PERT)

Answer 19

[Optimistic + (4 x Most Likely) + Pessimistic] / 6

Question 20

Formula for Triangular Distribution

Answer 20

[Optimistic + Most Likely + Pessimistic] / 3

Question 21

Formula for Range of the Estimates

Answer 21

Expected Activity Cost +- Activity Standard Deviation

Question 22

Purpose bring To develop an approximation of the monetary resources needed to complete project activities.

Answer 22

Estimate Costs process

Question 23

Purpose being To aggregate the estimated costs of individual activities or work packages to establish an authorized cost baseline.

Answer 23

Determine Budget process

Question 24

What includes the quantitative assessments of the probable costs required to complete the project work?

Answer 24

Activity Cost Estimates

Question 25

The process of aggregating the estimated costs of individual activities or work packages to establish an authorized cost baseline.

Answer 25

Determine Budget

Question 26

A component of the project management plan that describes how project resources are acquired, allocated, monitored, and controlled.

Answer 26

Resource Management Plan

Question 27

A repository in which outputs of risk management processes are recorded.

Answer 27

Risk Register

Question 28

Summing the lower-level cost estimates associated with the various work packages for a given level within the project’s WBS or for a given cost control account.

Process of rolling up costs through each level of the WBS

Answer 28

Cost Aggregation

Question 29

Documents and data on prior projects include project files, records, correspondence, closed contracts, and closed projects.

Answer 29

Historical Information

Question 30

Using parametric or analogous estimate models based on past experiences can aid in predicting total project costs.

Answer 30

Historical Information Review

Question 31

The process of comparing the planned expenditure of project funds against any limits on the commitment of funds for the project to identify any variances between the funding limits and the planned expenditures.

Answer 31

Funding Limit Reconciliation

Question 32

The approved version of the time-phased project budget, excluding any management reserves, which can be changed only through formal change control procedures and is used as a basis for comparison to actual results.

Answer 32

Cost Baseline

Question 33

Forecast project costs to be paid that are derived from the cost baseline for total or periodic requirements, including projected expenditures plus anticipated liabilities.

Answer 33

Project Funding Requirements

Question 34

What is the difference between the Cost Baseline and Project Budget.

Answer 34

Cost Baseline does not include Management Reserves, and Project Budget includes everything.