Exam 7: Determining Costs, Budget, and Earned Value

The percent complete estimate for a work package is subjective and requires an underestimated guess compared to the scope of the work package.

In many projects, large dollar amounts are expended for materials or services subcontractors, consultants) that are used over a period of time longer than one cost reporting period.

The project cost estimate is allocated to

Often, the sum of the initial estimated costs is greater than the amount of funds budgeted by the sponsor.What should be done to arrive at an acceptable budget amount?

When the CPI goes below 1.0 or gradually gets smaller, corrective action should not be taken, the project is performing well.

Costs are when an item is ordered even though actual payment may take place at some later time.

Plot curves on the same graph to reveal any trends toward improving or deteriorating cost performance.

It may be easier to estimate the costs for , but as the project progresses, the project team can progressively elaborate the estimated costs as more information is known or becomes clear to allow for more accurate estimated costs.

It is good practice to have the person who will be responsible for the costs associated with the work make the cost estimates.