Project+ Study Notes 22

Question 1

Once the budget review with the project team is complete, it is time to get the project sponsor’s approval and then create a cost baseline. The cost baseline is the total approved expected cost for the project. This should be approved before any work begins. All future expenditures and variances will be measured against this baseline.

Answer 1

Cost Baseline (b)

Question 2

The cost baseline is used throughout the remainder of the project to track the actual cost of the project against the estimated or planned costs. It is also used to predict future costs based on what’s been spent to date and to calculate the projected cost of the remaining work.

Answer 2

Cost Baseline (c)

Question 3

The project manager should communicate the ??? to the project stakeholders. Some stakeholders may want a copy of the total project budget, while others may be interested in the budget only for specific phases of the project. You should note each stakeholder’s needs regarding budget information in the communication plan.

Answer 3

Cost Baseline (d)

Question 4

includes measuring the project spending to date, determining the burn rate (or how fast you’re going through the money), and tracking expenditures to the cost baseline so that stakeholders can see what was planned versus what was actually spent on the project. Expenditure reporting is the mechanism you’ll use to report on the current state of the project budget.

Answer 4

Expenditure tracking

Question 5

is useful in tracking project spending. You can run reports that show spending to date versus what was planned, and you can also use software to look at the impact of adding new tasks or resources using what-if scenarios.

Answer 5

Project management software

Question 6

is a performance measurement technique that compares what your project has produced to what you’ve spent by monitoring the planned value, earned value, and actual costs expended to produce the work of the project. When variances that result in changes to the cost baseline are discovered, those changes should be managed using the project change control system. If the budget needs updating and/or funding has been added to the project, you’ll need approval and sign-off from the sponsor for the new cost baseline.

Answer 6

Earned value measurement (EVM)

Question 7

primary functions of EVM analysis techniques are to determine and document the cause of the variance, to determine the impact of the variance, and to determine whether a corrective action should be implemented as a result.

Answer 7

EVM info

Question 8

looks at schedule, cost, and scope project measurements together and compares them to the actual work completed to date. ??? is usually performed on the work packages or other WBS components. To perform the ??? calculations, you need to first gather these three measurements: planned value, actual cost, and earned value.

Answer 8

EVM

Question 9

is the cost of work that has been authorized and budgeted for a specific schedule activity or WBS component (such as a work package) during a given time period or phase.

Answer 9

planned value (PV)

Question 10

is the actual cost of completing the work component in a given time period. Actual costs might include direct and indirect costs but must correspond to what was budgeted for the activity.

Answer 10

Actual cost (AC)