One of the reasons why project cost estimates are inaccurate is because human beings are biased toward underestimation. |
T |
Analogous estimates are the most accurate technique to estimate costs. |
F |
A negative schedule variance means that it took lesser than planned to perform the work. |
F |
Analogous estimates are called activity-based costing. |
F |
If an important supplier goes out of business, management reserves can be set aside to cover the resulting costs. |
T |
A budgetary estimate is the most accurate of the three types of estimates. |
F |
The formulas for variances and indexes start with EV, the earned value. |
T |
Supporting details for an estimate include the ground rules and assumptions used in creating the estimate. |
T |
In an earned value chart, when the actual cost line is right on or above the earned value line, it indicates that costs are less than planned. |
F |
Budgetary estimates are made even before a project is officially started. |
F |
Which of the following is true of earned value? |
It is an estimate of the value of the physical work actually completed. |
_____ includes the processes required to ensure that a project team completes a project within an approved budget. |
Project cost management |
_____ are those costs that are difficult to measure in monetary terms. |
Intangible costs |
_____ helps develop an accurate projection of a project's financial expenses and benefits. |
Life cycle costing |
Which of the following is true of bottom-up estimates? |
They are time-intensive and expensive to develop. |
The main goal of the _____ process is to produce a cost baseline for measuring project performance and project funding requirements. |
cost budgeting |
If the cost estimate for a project is a basis for contract awards and performance reporting, it should be a(n) _____ estimate and as accurate as possible. |
definitive |
A _____ estimate is used for making many purchasing decisions for which accurate estimates are required and for estimating final project costs. |
definitive |
The process of controlling costs primarily involves: |
managing changes to the project budget. |
Which of the following is true of contingency reserves? |
They allow for future situations that can be partially planned for. |
Which of the following is true of the schedule performance index (SPI)? |
It can be used to estimate the projected time to complete the project. |
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. |
sunk |
Which of the following is an output of the process of controlling costs? |
Cost forecasts |
Which of the following is most likely to be a reason for inaccuracies in information technology cost estimates? |
People lack estimating experience. |
Analogous estimates are also known as _____ estimates. |
top-down |
Work performance information and cost forecasts are main outputs of the _____ process. |
cost control |
The cost performance index (CPI): |
can be used to estimate the projected cost of completing the project. |
_____ involves allocating the overall cost estimate to individual work items to establish a baseline for measuring performance. |
Determining the budget |
Which of the following involves developing an approximation of the costs of resources needed to complete a project? |
Estimating costs |
Schedule variance is: |
the earned value minus the planned value. |
Which of the following reserves allows for future situations that are unpredictable? |
Management reserves |
One of the main outputs of the _____ process is a cost baseline. |
cost budgeting |
A cost estimation tool which involves estimating individual work items or activities and summing them to get a project total is known as a(n) _____ estimate. |
bottom-up |
A rough order of magnitude estimate can be referred to as a _____ estimate. |
ballpark |
Indirect costs are: |
not directly related to the products or services of a project. |