Cost Management Question: Download Cost Management PDF

The cost contingency reserve should be:

A. Hidden to prevent management from disallowing the reserve
B. Added to each activity to provide the customer with a shorter critical path
C. Maintained by management to cover cost overruns
D. Added to the base costs of the project to account for risks

Answer:

D. Added to the base costs of the project to account for risks

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Your project has a medium amount of risk and is not very well defined. The sponsor hands you a project charter and asks you to confirm that the project can be completed within the project cost budget. What is the BEST method to handle this?

A. Build the estimate in the form of a range of possible results
B. Ask the team members to help estimate the cost based on the project charter
C. Based on the information you have, calculate a parametric estimate
D. Provide an analogous estimate based on past history.

The seller tells you that your activities have resulted in an increase in their costs. You should:

A. Recommend a change to the project costs
B. Have a meeting with management to find out what to do
C. Ask the seller for supporting information
D. Deny any wrongdoing