PMP Sample Questions (200 Questions) | Project Scope Management | Project Cost Management | Project Risk Management | Time Management Questions | Quality Management | Procurement Management | Communications Mgmt | Professional Conduct and Ethics | Human Resources | Integration Management |
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Project Cost Management is a group of processes required to ensure the project is completed within the approved budget.
There are following processes which are part of Project Cost Management.
•Plan Cost Management
•Estimate Costs
•Determine Budget
•Control Costs

Few Important points
You can expect five to ten questions related to Earned Value Management.
Planned Value (PV) refers to what the project should be worth at this point in the schedule. It is also referred as BCWS (Budgeted Cost of Work Scheduled).
Earned Value (EV) is the physical work completed to date and the authorized budget for that. It is also referred as BCWP (Budgeted Cost of Work Performed).
Actual Cost (AC) is the actual amount of money spent so far. It is also referred as ACWP (Actual Cost of Work Performed).
Estimate At Completion (EAC) refers to the estimated total cost of the project at completion.

CPI refers to Cost Performance Index. It is defined as

If CPI is less than 1, this means that the project is over budget.
BAC refers to Budget at Completion. It is related to EAC.

ETC refers to Estimate to Completion. It is defined as

CV refers to Cost Variance. It is defined as
CV = EV - AC

SV refers to Schedule Variance. It is defined as
SV = EV - PV

Negative cost or schedule variance means that project is behind in cost or schedule.
SPI refers to Schedule Performance Index. It is defined as

VAC refers to Variance At Completion. It is defined as

1.Plan Cost Management

2. Estimate Costs

3. Determine Budget

4. Control Costs

These questions are randomly taken from certchamp PMP exam kit

Question - 9

Your company has been hired to configure software in 500 computers. All computers need equal time to configure. The contract for the project is set at a fixed cost, and the incentive based on how fast the project work is going to be completed. Management has requested that you study the work method to determine a faster, less costly, and a better method to complete the project. This scenario is an example of _________.
1.Time Constraint
2.Schedule Constraint
3.Value Analysis
4.Learning Curve

Correct Answers are : 3
Explanation :

Value Analysis is a systematic approach to find less costly ways to complete the same work. A and B are incorrect, as this situation does not describe a specific time or cost constraint. D is incorrect: the learning curve happens as the project team completes the work.

Question - 12

You have just started a project. The project team member reported that 20 percent of the project is done. You agree with their completion status, but do not change any of the progress in your report to the customer. This is an example of which one of the following?
1.0/100 Rule
2.50/50 Rule
3.Percent Complete Rule
4.20/20 rule

Correct Answers are : 1
Explanation :

The 0/100 Rule allows for zero percent credit on an activity until it is 100 percent complete. B is wrong (50/50 rule): 50 percent completion when the work begins and 50 percent when the work is completed.

Question - 19

You have two possible projects to manage, but you can only choose one. Project MKTG is worth $23,000, while Project SALESPTR is worth $25,000. Management elects to choose Project SALESPTR. Which one of the following is the opportunity cost of this choice?

Correct Answers are : 1
Explanation :

The opportunity cost is the amount of the project that was not chosen.

Question - 39

Your project has a budget of $240,000 and is expect to last for 1 year, with the work and budget spread evenly across all months. The project is now in the fourth month, the work is on schedule, but you have already spent $120,000 of the project budget. What is your COST Variance in this case?

Correct Answers are : 1
Explanation :
A is the correct answer. The project is now in the fourth month, the work is on schedule means , percentage of work completed = (4/12)*100

Cost Variance = Earn Value - Actual Cost Earn Value = total cost * percentage of work actually completed = $240,000 * (4/12)=$80,000 CV = $80,000 - $120,000 = -$40,000