B.

Hidden to prevent management from disallowing the

Project Management Cost (1st)
Q1. While managing a project in another country,
you are asked to make a facilitating payment so the
country officials will issue a work order. What should
you do?
A. Make the payment
B. Do not pay and see what happens
reserve
C. Added to the base costs of the project to account for
risks
D. Added to each activity to provide the customer with
a shorten critical path
Q6. A project manager is working with management
to create the project estimate. During the initiating
process group, what level of accuracy should the
estimate have?

C. Ask the person for proof the payment is required A. -10% to +25%

D. Seek legal advice on whether such a payment is a B. +/-50%

bribe
C. -10% to +10%
Q2. You have been assigned as the project manager
on a new project. The organization uses a strong D. -25% to +75%
matrix structure. Computers needed to complete the
Q7. The customer responsible for overseeing your
projects are an example of:
project asks you to provide a written cost estimate
A. Limited cost that is 30% higher than your estimate of the project’s
cost. He explains that the budgeting process requires
B. Quality cost managers to estimate pessimistically to ensure
enough money is allocated for projects. What is the
C. Diminishing cost BEST way to handle this?
D. Fixed cost A. Add the 30% to your cost estimate by spreading it
evenly across all project activities
Q3. Which of the following is NOT needed in order to
come up with a project estimate? B. Add the 30% as a lump sum contingency fund to
handle project risks
A. A network diagram
C. Create one cost baseline for budget allocation
B. Risks
and a second one for the actual project
C. A WBS management plan

D. A change control system D. Ask for information on risks that would cause your
estimate to be too low
Q4. A cost baseline is an output of which cost
management process? Q8. An estimate that is -25% /+75% percent of actual is
considered a:
A. Determine Budget
A. Definitive estimate
B. Estimate Activity Resources
B. Parametric estimate
C. Control Costs
C. Budget estimate
D. Estimate Costs
D. Rough order of magnitude estimate
Q5. The cost contingency reserve should be:

A. Maintained by management to cover cost overruns

Q9. You are having difficulty estimating the cost of a C. Changes to the risk response plan
project. Which of the following BEST describes the
most probable cause of your difficulty? D. Lower quality deliverables

A. Lack of historical records from previous projects
B. Unavailability of desired resources
C. Lack of company processes
D. Inadequate scope definition
Q10. You were appointed as project manager for a
contact center project. To ensure project’s success, you
decided to send your team abroad to study on new
technologies. Which type of cost is team training?
Q14. Company ABC is evaluating three consulting
companies to find a consultant to perform
professional services. They request information on how
the three consulting companies allocate fringe benefits
to their clients. What type of cost is Company ABC
asking about?
A. Direct
B. Indirect
C. Variable

A. Fixed D. Fixed

B. Direct Q15. You are managing a new oil purification project in

a foreign country. A person informs you that you will
C. Indirect have to pay him a “transfer fee” for the permit to move
heavy equipment through the city. What is the FIRST
D. NPV
thing you should do?
Q11. The difference between the cost baseline and the
A. Make sure the person is really a government official
cost budget can be BEST described as:
B. Do not pay the fee
A. The management reserves
C. Negotiate openly with the city officials
B. The project cost estimate
D. Pay the fee, but only to the city
C. The cost account
Q16. Project setup costs are an example of:
D. The contingency reserves
A. Overhead costs
Q12. While visiting the country where a new branch
office is being built, you are told you must pay a B. Variable costs
$5,000 fee to the government permit officer to obtain
the facility permit required by law to start construction. C. Fixed costs
The construction company tells you this is standard
practice and is required by law. What should you do? D. Opportunity costs

A. Have the construction company pays the fee Q17. Which of the following information about the
project would NEVER be available during project
B. Refuse to pay the fee planning?

C. Pay the fee A. Budget at completion

D. Have the customer pay the fee B. Cost performance index

Q13. A project has a team member assigned to the C. Benefit cost ratio
project full time. What is the MOST likely effect on the
project if that resource completes her activity sooner D. Internal rate of return
than planned?

A. Wasted cost

B. A subsequent activity will be delayed

Q18. All of the following are inputs to the Determine D. Variable and fixed
Budget process EXCEPT:
Q23. The success of your new project requires several
A. Activity cost estimates of your people to work in a foreign country for six
months. The team informs you that in this country a
B. WBS payment is required to obtain visas. What should you
do?
C. Project scope statement
A. Include the payment in the project budget
D. Project performance reviews
B. Do not send your people
Q19. Which of the following is an example of a
parametric estimate? C. Do not pay and see what happens
A. Dollars per module D. Cancel the project
B. Bottom-up Q24. A rough order of magnitude estimate is made
during which project management process group?
C. CPM
A. Closing
D. Learning bend
B. Initiating
Q20. All of the following are outputs of the Estimate
Costs process except: C. Executing
A. An indication of the range of possible costs for the D. Planning
project
Q25. Analogous estimating:
B. The prevention of inappropriate changes being
included in the cost baseline A. Calculates estimates using actual detailed historical
costs
C. Documentation of any assumptions made during the
Estimate Costs process B. Is used most frequently during project executing

D. An understanding of the cost risk in the work that has
been estimated
Q21. The approximate resource costs necessary for
completing project activities are compiled during
which project management process?
C. Uses top-down estimating techniques
D. Uses bottom-up estimating techniques
Q26. Which of the following does NOT assess the value
a project bring to an organization

A. Forecasting A. Needs assessment

B. Estimate Costs B. Value analysis

C. Cost aggregation C. Net present value

D. Cost reserve analysis D. Cost benefit analysis

Q22. A project manager wants to decrease costs on a Q27. The project manager is allocating overall cost
project which a consultant is completing for her estimates to individual activities to establish a baseline
company. What costs should the project manager for measuring project performance. That process is
consider to accomplish this? this?

A. Direct and indirect A. Estimate Costs

B. Cost Management
B. Fixed and indirect
C. Control Costs
C. Variable and direct D. Determine Budget
Q28. During project planning, one of the electrical C. The team to buy into the project
engineers inform the project manager that the life cycle
cost of the new heating and air conditioning system is D. Management to buy into the project
higher than the life cycle cost of another heating and air
Q33. Which of the following is a KEY way to improve
conditioning system. What should the project manager
activity cost estimates?
do?
A. Use historical data
A. Select the product with the lower life cycle cost
B. Let the project manager create the activity cost
B. Determine if there is room in the project budget for
estimate
the additional costs
C. Base activity estimates on the upper and lower
C. Select the product with the lowest maintenance cost
control limits
to life cycle cost ratio
D. Let management create the management reserve
D. Select the product with the best life cycle cost to
and the activity cost estimate
earned value ratio
Q34. All of the following are tools of the Determine
Q29. Payment for any decision made or encouraged by
Budget process EXCEPT:
a foreign official with respect to whether a company will
be awarded a project is BEST described as: A. Reserve analysis
A. A bribe B. Funding limit reconciliation
B. A progress fee C. Aggregation
C. A common practice D. Bottom-up estimating
D. A sunk cost Q35. Which estimating method tends to be MOST costly
for creating a project cost estimate?
Q30. If a project manager is completing detailed
estimating, which type of estimating is MOST likely A. Bottom-up
being used?
B. Analogous
A. 50/50 rule
C. Parametric
B. Bottom-up
D. 50/50
C. Analogous
Q36. A cost management plan contains a description of:
D. Parametric
A. The WBS level at which earned value will be
Q31. How close to actual costs should a definitive calculated
budget estimate is?
B. The project costs
A. -5 percent to +10 percent
C. The budgets and how they were calculated
B. +/-20 %
D. How resources are allocated
C. -75% to +25%
Q37. A project manager needs to analyze the project
D. +10% to -25% costs to find ways to decrease costs. It would be
BEST if the project manager looks at:
Q32. Value analysis is performed to get:
A. Variable costs and fixed costs
A. A less costly way of doing the same work
B. Direct costs and variable costs
B. More value from the cost analysis C. Fixed costs and indirect costs
D. Indirect costs and direct costs