Sunday, 27 October 2013

Project Cost Management

1)    The main focus of Life Cycle Costing is to:

a.    Estimate installation Costs

b.    Estimate the cost of operations and maintenance

c.    Consider Installation costs when planning the project costs

d.    Consider Operations and maintenance costs in making project decisions.

(Answer: D)

2)    Cost Management Plan consists all the below EXCEPT

a.    Cost Methodology, Costing Tools to be used

b.    Level of Accuracy and Unit of Measure

c.    Control Thresholds and Rules for Performance Measurement

d.    Critical Path Templates

(Answer: D)

3)    Unit Rate Approach is adopted in

a.    Parametric Estimating
b.    Three-Point Estimating
c.    Analogues Estimating
d.    Monte Carlo Analysis

(Answer: A) 

4)    Project Cost Estimating includes all the below EXCEPT

a.    Direct Costs – Labour, Material, Equipment, Services and Training

b.    Indirect Costs  - Inflation allowance, Cost of Financing,

c.    Contingency Costs for the Approved Risks where contingency plan exists

d.    Drawing network diagram with activity buffers

(Answer: D) 

5)    As part of Cost Control, The project manager does all the below EXCEPT

a.    Monitoring  the variance between Estimated Costs and Actual Costs

b.    Identifying the root cause for the Variance

c.    Taking preventive/Corrective action to mitigate the related risk

d.    Aggregating Activity Estimates to arrive on Cost Estimates 

 (Answer: D) 

6)    All of the below are True with Cost baseline EXCEPT

a.    It is an authorized  time phased budget at completion (BAC)

b.    It is used to measure, monitor and control overall cost performance on the project.

c.    It is a summation of approved budgets by time period and displayed in the form of an S-curve.

d.    It is exactly similar to Funding spend Curve

(Answer: D) 

7)    One Common way to compute Estimate At Completion (EAC) is to take budget at Completion (BAC) and

a.    Divide by SPI

b.    Multiply by SPI

c.    Multiply by CPI

d.    Divide by CPI

 (Answer: d)
 
8)    Estimate At Completion (EAC) is a periodic evaluation of:

a.    The Cost of work completed

b.    The Value of Work performed

c.    The Anticipated total cost at project completion

d.    What it will cost to finish the project

 (Answer: C) 

9)    If Earned Value (EV) = 350, actual Cost (AC) = 400, Planned Value (PV) = 325, what is the Cost Variance (CV)?

a.    350

b.    -75

c.    400

d.    -50

 (Answer: D CV=EV-AC=350-400=-50) 

10) A Scheduled Performance Index (SPI) of 0.76 means

a.    You are over budget

b.    You are ahead of schedule

c.    You are progressing at 76% of the originally planned

d.    You are progressing at 24% of the originally planned

(Answer: C)

11) A Cost Baseline is an output of which Cost Management Process

a.    Estimate Activity Resources

b.    Estimate Costs

c.    Determine Budget

d.    Control Costs

(Answer: C)
12) A Cost Performance Index  (CPI) of 0.89 means

a.    At this time, we expect the project to cost 89% more than planned

b.    When the project  is completed, we wil have spent 89% more than planned

c.    The project is progressing 89% of the rate planned

d.    The project is getting 89 cents out of every dollar invested

 (Answer: D)
13) Which of the following is NOT needed in order to come up with project estimate?

a.    A WBS

b.    A Network Diagram

c.    Risks

d.    A change control system

 (Answer: D)
14) Which of the following represents the estimated Value of the work actually accomplished

a.    Earned Value (EV)

b.    Planned Value (PV)

c.    Actual Costs (AC)

d.    Cost Variance (CV)

 (Answer: A)

15) A manufacturing project has a schedule performance index (SPI) of 0.89 and a cost performance index (CPI) of 0.91. Generally, what is the BEST explanation for why this occurred?

a.    The scope was changed

b.    A supplier went out of business and a new one needed to be found

c.    Additional equipment needed to be purchased

d.    A critical path activity took longer and needed more labour hours to complete.

(Answer: D)

16) Earned Value Management is an example of

a.    Performance Reporting

b.    Planning Control

c.    Ishikawa Diagrams

d.    Integrating the project components into a whole

(Answer: A)

17) Which type of Cost is team training?

a.    Direct

b.    NPV

c.    Indirect

d.    Fixed
(Answer: A)

18) Project setup costs are an example of:

a.    Variable Costs

b.    Fixed Costs

c.    Overhead costs

d.    Opportunity Costs

(Answer:  B)

19) The difference between Cost baseline and the cost budget can be BEST described as

e.    The Management Reserves

f.     The Contingency Reserves

g.    The Project Cost Estimate

h.    The Cost Account

(Answer:  A)

20) Cost Baseline consists of all the below EXCEPT

a.    Project Activity Costs

b.    Contingency Reserves

c.    Project Indirect Costs

d.    Manager Reserve

(Answer: D)

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