Question 1

A _____ estimate is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs.

Accepted Answer

A)   budgetary
B)   definitive
C)   rough order of magnitude
D)   finalE) None of the above
F) All of the above

Question 2

A budgetary estimate is the most accurate of the three types of estimates.

Accepted Answer

A) True 
 B)False

Question 3

The main outputs of the _____ process are activity cost estimates, basis of estimates, and project document updates.

Accepted Answer

The answer of The main outputs of the _____ process...

Question 4

Project managers must conduct cash flow analysis to determine net present value.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following is true of the schedule performance index (SPI) ?

Accepted Answer

A)   It can be used to estimate the projected time to complete the project.
B)   It means that a project is behind schedule if an SPI is greater than one.
C)   It means that a project is ahead of schedule if SPI is lesser than one or hundred percent.
D)   It is the ratio of planned value to actual costs.E) A) and B)
F) A) and D)

Question 6

It is important for project managers to understand that every cost estimate is unique.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is true of a rough order of magnitude estimate?

Accepted Answer

A)   It is used to allocate money into an organization's budget.
B)   It provides an estimate of what a project will cost.
C)   Its timeframe is always less than a year prior to project completion.
D)   It is a type of estimate that is done in the final stages of a project.E) None of the above
F) A) and D)

Question 8

One of the main outputs of the _____ process is a cost baseline.

Accepted Answer

A)   cost controlling
B)   cost estimating
C)   cost budgeting
D)   cost planningE) None of the above
F) B) and C)

Question 9

Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company closes the store down due to high operating costs. In such a scenario, the money spent in paying for the rent of the store in Baltonia would be an example of _____ costs.

Accepted Answer

A)   recurring
B)   direct
C)   sunk
D)   intangibleE) C) and D)
F) All of the above

Question 10

The main output of the planning cost management process is a(n) _____.

Accepted Answer

cost manag...

Question 11

Which of the following is an input of the process of controlling costs?

Accepted Answer

A)   Cost forecasts
B)   Work performance data
C)   Change requests
D)   Scope baselineE) A) and D)
F) C) and D)

Question 12

Which of the following is true of analogous estimates?

Accepted Answer

A)   Their main disadvantage is that they cost more than other techniques.
B)   They are the only technique which do not require expert judgement.
C)   They are most reliable when previous projects are similar in fact with current projects.
D)   They use project characteristics in a mathematical model to estimate project costs.E) All of the above
F) B) and C)

Question 13

Soles is a footwear company which has recently set up its store in Ambrosia. To manufacture its products, Soles incurs a range of different costs. Which of the following would be an example of an indirect cost?

Accepted Answer

A)   Cost of machines to produce shoes
B)   Salary paid to factory workers
C)   Electricity used to run its factories
D)   Cost of leather used to manufacture shoesE) B) and C)
F) B) and D)

Question 14

The _____ is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.

Accepted Answer

The answer of The _____ is based on the original...

Question 15

A cost management plan can include organizational procedures links, control thresholds, and process descriptions.

Accepted Answer

A) True 
 B)False

Question 16

A rough order of magnitude estimate can be referred to as a _____ estimate.

Accepted Answer

A)   definitive
B)   budgetary
C)   final
D)   ballparkE) A) and B)
F) A) and C)

Question 17

Which of the following involves developing an approximation of the costs of resources needed to complete a project?

Accepted Answer

A)   Determining the budget
B)   Finalising the cost baseline
C)   Controlling costs
D)   Estimating costsE) A) and C)
F) A) and B)

Question 18

Indirect costs are:

Accepted Answer

A)   directly related to performing the project.
B)   those that cannot be allocated to projects.
C)   those that can be easily controlled by managers.
D)   not directly related to the products or services of a project.E) A) and D)
F) A) and C)

Question 19

It is important for project managers to focus on indirect costs because they can be easily controlled.

Accepted Answer

A) True 
 B)False

Question 20

If cost variance is a positive number, it means that performing the work costs more than planned.

Accepted Answer

A) True 
 B)False

Exam 7: Project Cost Management

A rough order of magnitude estimate can be referred to as a _____ estimate.

Correct AnswerverifiedShow Answer

Which of the following involves developing an approximation of the costs of resources needed to complete a project?

Correct AnswerverifiedShow Answer

A cost management plan can include organizational procedures links, control thresholds, and process descriptions.

Correct AnswerverifiedShow Answer

It is important for project managers to focus on indirect costs because they can be easily controlled.

Correct AnswerverifiedShow Answer

The main outputs of the _____ process are activity cost estimates, basis of estimates, and project document updates.

Correct AnswerverifiedShow Answer

Good Earth, a company manufacturing packaged food products, sets up its stores in Baltonia. However, a year later, the company closes the store down due to high operating costs. In such a scenario, the money spent in paying for the rent of the store in Baltonia would be an example of _____ costs.

Correct AnswerverifiedShow Answer

Indirect costs are:

Correct AnswerverifiedShow Answer

Which of the following is true of analogous estimates?

Correct AnswerverifiedShow Answer

A _____ estimate is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs.

Correct AnswerverifiedShow Answer

If cost variance is a positive number, it means that performing the work costs more than planned.

Correct AnswerverifiedShow Answer

Soles is a footwear company which has recently set up its store in Ambrosia. To manufacture its products, Soles incurs a range of different costs. Which of the following would be an example of an indirect cost?

Correct AnswerverifiedShow Answer

Which of the following is true of the schedule performance index (SPI) ?

Correct AnswerverifiedShow Answer

Which of the following is an input of the process of controlling costs?

Correct AnswerverifiedShow Answer

A budgetary estimate is the most accurate of the three types of estimates.

Correct AnswerverifiedShow Answer

The main output of the planning cost management process is a(n) _____.

Correct Answerverifiedcost manag...View AnswerShow Answer

It is important for project managers to understand that every cost estimate is unique.

Correct AnswerverifiedShow Answer

Which of the following is true of a rough order of magnitude estimate?

Correct AnswerverifiedShow Answer

One of the main outputs of the _____ process is a cost baseline.

Correct AnswerverifiedShow Answer

The _____ is based on the original planned costs for the project or activity and the rate at which the team is completing work on the project or activity to date.

Correct AnswerverifiedShow Answer

Project managers must conduct cash flow analysis to determine net present value.

Correct AnswerverifiedShow Answer

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cost manag...
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