Cost Management Interview Questions And Answers

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Elevate your Cost Management interview readiness with our detailed compilation of 49 questions. Our questions cover a wide range of topics in Cost Management to ensure you're well-prepared. Whether you're new to the field or have years of experience, these questions are designed to help you succeed. Download the free PDF to have all 49 questions at your fingertips. This resource is designed to boost your confidence and ensure you're interview-ready.

49 Cost Management Questions and Answers:

Cost Management Job Interview Questions Table of Contents:

Cost Management Job Interview Questions and Answers

1 :: Analogous estimating:

A. Uses bottom-up estimating techniques
B. Is used most frequently during the executing processes of the project
C. Uses top-down estimating techniques
D. Uses actual detailed historical cost

C. Uses top-down estimating techniques

2 :: All of the following are outputs of the Estimate Costs process EXCEPT:

A. An understanding of the cost risk in the work that has been estimated
B. The prevention of inappropriate changes from being induded in the cost baseline
C. An indication of the range of possible costs for the project
D. Documentation of any assumptions made during the Estimate Costs process

B. The prevention of inappropriate changes from being induded in the cost baseline

3 :: If earned value (EV) = 350, actual cost (AC) = 400, planned value (PV) = 325, what is cost variance (CV)?

A. 350
B. -75
C. 400
D. -50

D. -50

4 :: One common way to compute estimate at completion (EAC) is to take the budget at completion (BAC) and:

A. Divide by SPI
B. Multiply by SPI
C. Multiply by CPI
D. Divide by CPI

Divide by CPI

5 :: Estimate at completion (EAC) is a periodic evaluation of:

A. The cost of work completed
B. The value of work performed
C. The anticipated total cost at project completion
D. What it will cost to finish the job

C. The anticipated total cost at project completion

6 :: The main focus of life cycle costing is to:

A. Estimate installation costs
B. Estimate the cost of operations and maintenance
C. Consider installation costs when planning the project costs
D. Consider operations and maintenance costs in making project decisions

D. Consider operations and maintenance costs in making project decisions

7 :: Cost performance measurement is BEST done through which of the following?

A. Asking for a percent complete from each team member and reporting that in the monthly progress report
B. Calculating earned value and using the indexes and other calculations to report past performance and forecast future performance
C. Using the 50/50 rule and making sure the life cyde cost is less than the project cost
D. Focusing on the amount expended last month and what will be expended the following month

B. Calculating earned value and using the indexes and other calculations to report past performance and forecast future performance

8 :: A cost performance index (CPI) of 0.89 means:

A. At this time, we expect the total project to cost 89 percent more than planned
B. When the project is completed we will have spent 89 percent more than planned
C. The project is only progressing at 89 percent of the rate planned
D. The project is only getting 89 cents out of every dollar invested

D. The project is only getting 89 cents out of every dollar invested

9 :: A schedule performance index (SPI) of 0.76 means:

A. You are over budget
B. You are ahead of schedule
C. You are only progressing at 76 percent of the rate originally planned
D. You are only progressing at 24 percent of the rate originally planned

C. You are only progressing at 76 percent of the rate originally planned

10 :: Which of the following is NOT needed in order to come up with a project estimate?

A. A WBS
B. A network diagram
C. Risks
D. A change control system

D. A change control system

11 :: Which of the following is an example of a parametric estimate?

A. Dollars per module
B. Learning bend
C. Bottom-up
D. CPM

A. Dollars per module

12 :: A rough order of magnitude estimate is made during which project management process group?

A. Planning
B. Closing
C. Executing
D. Initiating

D. Initiating

13 :: A cost baseline is an output of which cost management process?

A. Estimate Activity Resources
B. Estimate Costs
C. Determine Budget
D. Control Costs

C. Determine Budget

14 :: During which project management process group are budget forecasts created?

A. Monitoring and controlling
B. Planning
C. Initiating
D. Executing

A. Monitoring and controlling

15 :: Project setup costs are an example of:

A. Variable costs
B. Fixed costs
C. Overhead costs
D. Opportunity costs

B. Fixed costs

16 :: Value analysis is performed to get:

A. More value from the cost analysis
B. Management to buy into the project
C. The team to buy into the project
D. A less costly way of doing the same work

D. A less costly way of doing the same work

17 :: Which type of cost is team training?

A. Direct
B. NPV
C. Indirect
D. Fixed

A. Direct

18 :: Which of the following represents the estimated value of the work actually accomplished?

A. Earned value (EV)
B. Planned value (PV)
C. Actual cost (AC)
D. Cost variance (CV)

A. Earned value (EV)

19 :: Which of the following are ALL items included in the cost management plan?

A. The level of accuracy needed for estimates, rules for measuring cost performance, specifications for how duration estimates should be stated
B. Specifications for how estimates should be stated, rules for measuring cost performance, the level of accuracy needed for estimates
C. Rules for measuring team performance, the level of accuracy needed for estimates, specifications for how estimates should be stated
D. Specifications for how estimates should be stated, the level of risk needed for estimates, rules for measuring cost performance

B. Specifications for how estimates should be stated, rules for measuring cost performance, the level of accuracy needed for estimates

20 :: 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.

A. Build the estimate in the form of a range of possible results

21 :: 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

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

22 :: 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

C. Ask the seller for supporting information

23 :: Your cost forecast shows that you will have a cost overrun at the end of the project. Which of the following should you do?

A. Eliminate risks in estimates and reestimate
B. Meet with the sponsor to find out what work can be done sooner
C. Cut quality
D. Decrease scope

A. Eliminate risks in estimates and reestimate

24 :: A new store development project requires the purchase of various equipment, machinery, and furniture. The department responsible for the development recently centralized its external purchasing process and standardized its new order system. In which document can these new procedures be found?

A. Project scope statement
B. WBS
C. Staffing management plan
D. Organizational policies

D. Organizational policies

25 :: Early in the life of your project, you are having a discussion with the sponsor about what estimating techniques should be used. You want a form of expert judgment, but the sponsor argues for analogous estimating. It would be BEST to:

A. Agree to analogous estimating, as it is a form of expert judgment
B. Suggest life cyde costing as a compromise
C. Determine why the sponsor wants such an accurate estimate
D. Try to convince the sponsor to allow expert judgment because it is typically more accurate

A. Agree to analogous estimating, as it is a form of expert judgment

Cost Management Interview Questions And Answers

Download Cost Management Interview Questions and Answers PDF

49 Cost Management Questions and Answers:

Cost Management Job Interview Questions Table of Contents:

1 :: Analogous estimating: A. Uses bottom-up estimating techniques B. Is used most frequently during the executing processes of the project C. Uses top-down estimating techniques D. Uses actual detailed historical cost

3 :: If earned value (EV) = 350, actual cost (AC) = 400, planned value (PV) = 325, what is cost variance (CV)? A. 350 B. -75 C. 400 D. -50

4 :: One common way to compute estimate at completion (EAC) is to take the budget at completion (BAC) and: A. Divide by SPI B. Multiply by SPI C. Multiply by CPI D. Divide by CPI

5 :: Estimate at completion (EAC) is a periodic evaluation of: A. The cost of work completed B. The value of work performed C. The anticipated total cost at project completion D. What it will cost to finish the job

6 :: The main focus of life cycle costing is to: A. Estimate installation costs B. Estimate the cost of operations and maintenance C. Consider installation costs when planning the project costs D. Consider operations and maintenance costs in making project decisions

9 :: A schedule performance index (SPI) of 0.76 means: A. You are over budget B. You are ahead of schedule C. You are only progressing at 76 percent of the rate originally planned D. You are only progressing at 24 percent of the rate originally planned

10 :: Which of the following is NOT needed in order to come up with a project estimate? A. A WBS B. A network diagram C. Risks D. A change control system

11 :: Which of the following is an example of a parametric estimate? A. Dollars per module B. Learning bend C. Bottom-up D. CPM

12 :: A rough order of magnitude estimate is made during which project management process group? A. Planning B. Closing C. Executing D. Initiating

13 :: A cost baseline is an output of which cost management process? A. Estimate Activity Resources B. Estimate Costs C. Determine Budget D. Control Costs

14 :: During which project management process group are budget forecasts created? A. Monitoring and controlling B. Planning C. Initiating D. Executing

15 :: Project setup costs are an example of: A. Variable costs B. Fixed costs C. Overhead costs D. Opportunity costs

16 :: Value analysis is performed to get: A. More value from the cost analysis B. Management to buy into the project C. The team to buy into the project D. A less costly way of doing the same work

17 :: Which type of cost is team training? A. Direct B. NPV C. Indirect D. Fixed

18 :: Which of the following represents the estimated value of the work actually accomplished? A. Earned value (EV) B. Planned value (PV) C. Actual cost (AC) D. Cost variance (CV)

21 :: 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

22 :: 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

23 :: Your cost forecast shows that you will have a cost overrun at the end of the project. Which of the following should you do? A. Eliminate risks in estimates and reestimate B. Meet with the sponsor to find out what work can be done sooner C. Cut quality D. Decrease scope