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Study Guide Cost Practice Exam

Activity A is worth $200, is 100% complete, should have been done on day one, and actually cost $200. Activity B is worth $75, is 90% complete, should have been done on day two, and actually cost $120 so far. Activity C is worth $200, is 75% complete and should have been done on day three, and has cost $175 so far. The total budget is $1,000. What is the planned value as of day two?
Select one:
a. $495.00
b. -$275.00
c. -$417.50
d. $275.00 Correct

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Question 2

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Company-wide server upgrades are an example of what type of project cost?
Select one:
a. Variable indirect Correct
b. Variable
c. Fixed
d. Fixed direct

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Question 3

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Project A has an NPV of $150K over three years. Project B has an NPV of $330K over six years. Project C has an NPV of $170K over six years. Which of the following do you select?
Select one:
a. Project A and C
b. Project A
c. Project C
d. Project B Correct

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Question 4

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Project A has an NPV of $275K over 2.5 years. Project B has an IRR of 3.2%. Project C has a BCR of 0.89:1. Project D has four people on it and is encountering scope creep. Which of the following projects stand the greatest chance of getting canceled?
Select one:
a. Project D
b. Project A
c. Project C Correct
d. Project B

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Question 5

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The BCR project comparison function utilizes what variable(s)?
Select one:
a. Revenue and cost Correct
b. Benefit and profit
c. Revenue and profit
d. Profit margin

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Question 6

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The highway project is in the middle of planning when the project manager presents a status reporting method to the team. The team members haven’t heard of this method before. It’s called earned value. To attain buy-in from the team, the project manager begins to explain what earned value status reporting can do for the project, explaining that it will measure which of the following?
Select one:
a. Scope, schedule, and cost Correct
b. Scope and cost
c. Scope and schedule
d. Schedule and cost

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Question 7

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The infrastructure project is behind schedule and over budget. So far, $3M has been spent on the project. The sponsor is considering if it should allow the project to continue. What should he consider the $3M that has been spent so far?
Select one:
a. The amount for phase one
b. The budgeted cost of work performed
c. Opportunity cost
d. Sunk cost Correct

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Question 8

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The planning process group is progressing. The team has involved a number of expert opinions in trying to approximate the costs needed to complete project activities. This process is known as?
Select one:
c. Analogous estimating

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Question 9

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The project is using a new server that cost $25,000. The project manager is told to set up depreciation for the server over a five-year schedule, with the server having a value of $0 at the end of five years. Standard depreciation will be used in the calculation. What is the amount per year the server will depreciate?
Select one:
a. $2,500
b. Not enough information
c. $5,000 Correct
d. $10,000

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Question 10

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The project is using some application and database servers in the development environment. The finance department explains that the servers will be depreciated using the double declining balance (DDB) format. This is an example of what?
Select one:
a. Fixed direct cost
b. Accelerated depreciation Correct
c. Fixed cost
d. Standard depreciation

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Question 11

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The project management team has performed earned value analysis on its project and discovered that the project is behind schedule and over budget. The SPI is 0.82 and the CPI is 0.73. The team is trying to determine how efficient it needs to be with the remaining resources to complete the project on budget. Which of the following is the team trying to calculate?
Select one:
a. To-complete performance index Correct
b. Estimate to complete
c. Cost performance index
d. Cost variance

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Question 12

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The project planning process group is progressing. The team has involved the accounting department to set up a system of codes that the accounting department will use to track work on the project. This is known as what?
Select one:
a. Chart of accounts Correct
b. WBS numbering
c. Accounting codes

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Question 13

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The project team is developing rules for reporting updates on the project. The majority of the activities are greater than two reporting periods long. Which format is best to use in this case?
Select one:
a. Forecast reporting
b. Fixed formula progress reporting
c. Earned value
d. Weighted milestone Correct

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Question 14

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The project team is developing rules for reporting updates on the project. The majority of their activities are less than two reporting periods long. Which format is best to use in this case?
Select one:
a. Weighted milestone
b. Earned value
c. Fixed formula progress reporting Correct
d. Forecast reporting

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Question 15

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The project team is planning an upgrade to a client’s website and infrastructure. During planning, the team discovers the need for a data communications line to connect to the servers. What type of cost is this?
Select one:
a. Indirect fixed
b. Indirect
c. Variable
d. Direct Correct

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Question 16

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The project team is planning an upgrade to a client’s website and infrastructure. During planning, the team members are confronted with the cost options for a data communications line to connect to the servers. They consider the cost of purchasing the communication line for the time they need to develop the project. After that, the customer takes over the purchase of the line. They are also considering a long-term commitment that the customer can make with the communication line provider, which provides a less costly solution over the use of the system. What type of analysis is the team considering?
Select one:
a. Fixed cost
b. Make-or-buy analysis
c. Life cycle costing Correct
d. Procurement planning

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Question 17

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What is the range of a rough order of magnitude (ROM) estimate?
Select one:
a. -25% to +75% Correct
b. -300% to +75%
c. -5% to +10%
d. -10% to +10%

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Question 18

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Which of the following is an example of fixed formula status reporting?
Select one:
a. PV multiplied by % complete
b. The project manager updating the status reports quantitatively
c. Getting status updates from the project team
d. 30%/70% rule Correct

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Question 19

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Which of the following metrics tells you if you are ahead of schedule?
Select one:
a. Cost performance index (CPI)
b. Cost variance (CV)
c. Schedule performance index (SPI) Correct
d. Budget at completion (BAC)

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Question 20

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Which of the following shows the rate at which the project is progressing compared to what was planned?
Select one:
a. Schedule performance index Correct
b. Gantt chart
c. Schedule variance
d. Variance report

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Question 21

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Which of the following shows the remaining amount to be spent on the project based on current spending efficiency?
Select one:
a. Estimate at completion
b. Estimate to complete Correct
c. Budget remaining
d. Cost variance

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Question 22

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Which process aggregates estimated costs from the individual work packages or activities to create a summary and detailed breakdown of project costs?
Select one:
b. Earned value management

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Question 23

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What is the CPI?
Select one:
a. 0.40
b. 0.50
c. 0.45 Correct
d. 1.00

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Question 24

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What is the total value of the project?
Select one:
a. $2,250
b. $5,000
c. $10,000
d. $7,500 Correct

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Question 25

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What is the EV?
Select one:
a. $10,000
b. $7,500
c. $2,250 Correct
d. $5,000

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Question 26

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What is the amount of work that should have been done so far?
Select one:
a. $4,500 Correct
b. $5,000
c. $7,500
d. $2,250

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Question 27

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What is the ETC?
Select one:
a. $5,000
b. $16,666.67
c. $0
d. $11,666.67 Correct

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Question 28

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What do you expect the project to cost at completion based on the current performance?
Select one:
a. $0
b. $16,666.67 Correct
c. $11,666.67
d. $5,000

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Question 29

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You are having a home theater room added to your house. The project should take five days and cost $1,500 per day to complete. After three days, the project is 30% complete and $5,000 has been spent. What is the SPI?
Select one:
a. 0.50 Correct
b. 0.45
c. 0.40
d. 1.00

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Question 30

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You have $1,000 today and can earn 8%. In future years, how much money will this be worth?
Select one:
a. $883
b. Not enough information Correct
c. $1,202
d. $1,175

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