PMI PMP-Project Management Professional Practice Exam Q. 1041 to 1050
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Set of 10 Questions
Correct Answer has been Highlighted in RED
Q. 1041: You are using earned value progress reporting for your current project in an effort to teach your software developers the benefits of earned value. You plan to display project results on the cafeteria bulletin board so that the team knows how the project is progressing.
PV = $2.200 EV = $2.000 AC = $2.500 BAC = $10.000
The CV for this project is:
A. 300
B. -$300
C. 500
D. -$500
Section: Mix Questions
Justification in favor of the correct answer:
CV is calculated as EV – AC (in this case. $2.000 – $2.500).
A negative CV means that accomplishing work on the project is costing more than was budgeted.
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Q. 1042: You are using earned value progress reporting for your current project in an effort to teach your software developers the benefits of earned value. You plan to display project results on the cafeteria bulletin board so that the team knows how the project is progressing.
PV = $2.200 EV = $2.000 AC = $2.500 BAC = $10.000
What is the EAC for this project, and what does it represent?
A. $12.500: the revised estimate for total project cost (based on performance thus far)
B. $10.000: the revised estimate for total project cost (based on performance thus far)
C. $12.500: the original project budget
D. $10.000: the original project budget
Section: Mix Questions
Justification in favor of the correct answer:
EAC is calculated as BAC/CPI (in this case, $10.000/0.80). It is now known that the project will cost more than the original estimate of $10.000. The project has been getting only cents worth of work done for every dollar spent (CPI), and this information has been used to forecast total project costs. This approach assumes that performance for the remainder of the project will also be based on a CPI of 0.80.
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Q. 1043: You have now prepared your cost management plan so now you are preparing your project’s cost estimate. You decided to use analogous estimating. Which of the following is NOT characteristic of analogous estimating?
A. Supports top-down estimating
B. Is a form of expert judgment
C. Has an accuracy rate of ±10% of actual costs
D. Involves using the cost of a previous, similar project as the basis for estimating current project cost
Section: Mix Questions
Justification in favor of the correct answer:
A frequently used method of estimate costs, the analogous technique relies on experience and knowledge gained to predict future events. This technique provides planners with some idea of the magnitude of project costs but generally not within ± 10%.
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Q. 1044: All the following are outputs of the estimate cost process EXCEPT:
A. Activity cost estimates
B. Basis of estimates
C. Documented constraints
D. Cost baseline
Section: Mix Questions
Justification in favor of the correct answer:
Cost baseline is an output from the determine budget process.
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Q. 1045: You must consider direct costs, indirect costs, overhead costs, and general and administrative costs during cost estimating. Which of the following is NOT an example of a direct cost?
A. Salary of the project manager
B. Subcontractor expenses
C. Materials used by the project
D. Electricity
Section: Mix Questions
Justification in favor of the correct answer:
Direct costs are incurred for the exclusive benefit of a project (for example, salary of the project manager, materials used by the project, and subcontractor expenses). Indirect costs, also called overhead costs, are allocated to a project by its performing organization as a cost of doing business. These costs cannot be traced to a specific project and are accumulated and allocated equitably over multiple projects (for example, security guards, fringe benefits, and electricity).
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Q. 1046: If the cost variance is the same as the schedule variance and both numbers are greater than zero, then:
A. The cost variance is due to the schedule variance
B. The variance is favorable to the project
C. The schedule variance can be easily corrected
D. Labor rates have escalated since the project began
Section: Mix Questions
Justification in favor of the correct answer:
A positive schedule variance indicates that the project is ahead of schedule. A positive cost variance indicates that the project has incurred less cost than estimated for the work accomplished; therefore, the project is under budget.
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Q. 1047: You are responsible for preparing a cost estimate for a large World Bank project. You decide to prepare a bottom-up estimate because your estimate needs to be as accurate as possible. Your first step is to:
A. Locate a computerized tool to assist in the process
B. Use the cost estimate from a previous project to help you prepare this estimate
C. Identify and estimate the cost for each work package or activity
D. Consult with subject matter experts and use their suggestions as the basis for your estimate
Section: Mix Questions
Justification in favor of the correct answer:
Bottom-up estimating is derived by first estimating the cost of the project’s elemental tasks at the lower levels of the WBS or for an activity and then aggregating those estimates at successively higher levels of the WBS for subsequent reporting and tracking purposes.
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Q. 1048: Management has grown weary of the many surprises, mostly negative, that occur on your projects. In an effort to provide stakeholders with an effective performance metric, you will use the to-complete performance index (TCPI). Its purpose is to:
A. Determine the schedule and cost performance needed to complete the remaining work within management’s financial goal for the project
B. Determine the cost performance needed to complete the remaining work within management’s financial goal for the project
C. Predict final project costs
D. Predict final project schedule and costs
Section: Mix Questions
Justification in favor of the correct answer:
Determine the cost performance needed to complete the remaining work within management’s financial goal for the project The TCPI takes the value of work remaining and divides it by the value of funds remaining to obtain the cost performance factor needed to complete all remaining work according to a financial goal set by management.
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Q. 1049: If operations on a work package were estimated to cost $1,500 and finish today but, instead, have cost $1,350 and are only two-thirds complete, the cost variance is:
A. $150
B. -$150
C. -$350
D. -$500
Section: Mix Questions
Justification in favor of the correct answer:
CV is calculated by EV – AC, or $1,500(2/3) – $1,350 = -$350.
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Q. 1050: When you review cost performance data on your project, different responses will be required depending on the degree of variance or control thresholds from the baseline. For example, a variance of 10 percent might not require immediate action, whereas a variance of 100 percent will require investigation. A description of how you plan to manage cost variances should be included in the:
A. Cost management plan
B. Change management plan
C. Performance measurement plan
D. Variance management plan
Section: Mix Questions
Justification in favor of the correct answer:
The management and control of costs focuses on variance thresholds. Certain variances are acceptable, and others, usually those falling outside a particular range, are unacceptable. They are typically expressed as percentage deviations from the baseline plan. The actions taken by the project manager for variances are described in the cost management plan.
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