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Project Cost Management PMP Questions

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Project Cost Management

1. Estimate Costs


2. Determine Budget


3. Control Costs


These questions are randomly taken from certchamp PMP exam kit

Question - 9

Your company has been hired to configure software in 500 computers. All computers need equal time to configure. The contract for the project is set at a fixed cost, and the incentive based on how fast the project work is going to be completed. Management has requested that you study the work method to determine a faster, less costly, and a better method to complete the project. This scenario is an example of _________.
1.Time Constraint
2.Schedule Constraint
3.Value Analysis
4.Learning Curve

Correct Answers are : 3
Explanation :

Value Analysis is a systematic approach to find less costly ways to complete the same work. A and B are incorrect, as this situation does not describe a specific time or cost constraint. D is incorrect: the learning curve happens as the project team completes the work.

Question - 12

You have just started a project. The project team member reported that 20 percent of the project is done. You agree with their completion status, but do not change any of the progress in your report to the customer. This is an example of which one of the following?
1.0/100 Rule
2.50/50 Rule
3.Percent Complete Rule
4.20/20 rule

Correct Answers are : 1
Explanation :

The 0/100 Rule allows for zero percent credit on an activity until it is 100 percent complete. B is wrong (50/50 rule): 50 percent completion when the work begins and 50 percent when the work is completed.

Question - 19

You have two possible projects to manage, but you can only choose one. Project MKTG is worth $23,000, while Project SALESPTR is worth $25,000. Management elects to choose Project SALESPTR. Which one of the following is the opportunity cost of this choice?
1.$23,000
2.$27,000
3.$50,000
4.$4000

Correct Answers are : 1
Explanation :

The opportunity cost is the amount of the project that was not chosen.

Question - 39

Your project has a budget of $240,000 and is expect to last for 1 year, with the work and budget spread evenly across all months. The project is now in the fourth month, the work is on schedule, but you have already spent $120,000 of the project budget. What is your COST Variance in this case?
1.-$40,000
2.$40,000
3.$240,000
4.$56,000

Correct Answers are : 1
Explanation :
A is the correct answer. The project is now in the fourth month, the work is on schedule means , percentage of work completed = (4/12)*100

Cost Variance = Earn Value - Actual Cost Earn Value = total cost * percentage of work actually completed = $240,000 * (4/12)=$80,000 CV = $80,000 - $120,000 = -$40,000