PMT 3600V EXAM 2 COMPREHENSIVE PRACTICE QUESTION
BANK: 200 EVM MASTERY QUESTIONS WITH CORRECT
ANSWERS, DETAILED RATIONALES, AND COMPLETE SOLUTION
SETS COVERING ALL EARNED VALUE MANAGEMENT TOPICS
INCLUDING PERFORMANCE MEASUREMENT BASELINES,
VARIANCE ANALYSIS, FORECASTING, INDICES, BUDGETING,
REBASELINING (OTB/OTS), AND INTEGRATED BASELINE
REVIEWS
1. What is the definition of BCWS in Earned Value Management?
A) The total cost incurred for work accomplished
B) The budgeted amount for work scheduled to be completed by a
given time
C) The actual cost of work performed
D) The estimated cost at project completion
Answer: B
Rationale: BCWS stands for Budgeted Cost for Work Scheduled, which is
the planned value (PV). It represents the authorized budget assigned to
the work that is scheduled to be accomplished within a specific time
period.
2. Which formula correctly calculates Cost Variance (CV)?
A) CV = BCWP - ACWP
B) CV = BCWS - BCWP
C) CV = ACWP - BCWP
D) CV = BAC - EAC
,Answer: A
Rationale: Cost Variance is the difference between the earned value
(BCWP) and the actual cost (ACWP). A positive CV indicates the project
is under budget.
3. What does a Schedule Performance Index (SPI) of 1.2 indicate?
A) The project is behind schedule by 20%
B) The project is ahead of schedule by 20%
C) The project is over budget by 20%
D) The project is under budget by 20%
Answer: B
Rationale: SPI = BCWP / BCWS. An SPI greater than 1.0 indicates that
the project is progressing faster than planned, meaning it is ahead of
schedule.
4. What is the primary purpose of an Integrated Baseline Review
(IBR)?
A) To audit the contractor's financial records
B) To verify that the Performance Measurement Baseline is realistic and
covers the full technical scope
C) To approve contract change orders
D) To finalize the project budget
Answer: B
Rationale: The IBR is a joint review between the customer and
contractor to ensure the PMB is achievable, adequately planned, and
includes all the authorized technical work scope.
5. Which type of variance analysis focuses on the difference between
the earned value and the planned value?
A) Cost Variance
,B) Schedule Variance
C) Estimate at Completion Variance
D) Budget Variance
Answer: B
Rationale: Schedule Variance (SV = BCWP - BCWS) specifically measures
the difference between the work actually performed and the work that
was scheduled to be performed.
6. What is the correct formula for Estimate at Completion (EAC) if the
current CPI is expected to continue for the remainder of the project?
A) EAC = ACWP + (BAC - BCWP)
B) EAC = BAC / CPI
C) EAC = BAC / (CPI * SPI)
D) EAC = ACWP + (BAC - BCWP) / CPI
Answer: B
Rationale: When the current cost performance (CPI) is projected to
continue, the most common formula is EAC = BAC / CPI, which
extrapolates the current efficiency to the remaining work.
7. What does the term "Undistributed Budget" (UB) refer to?
A) Budget set aside for unforeseen risks
B) Budget that has not yet been assigned to specific control accounts or
work packages
C) The total contract budget
D) Budget for profit and overhead
Answer: B
Rationale: Undistributed Budget is a temporary holding category for
budget that is authorized but not yet allocated to specific control
accounts or work packages. Once identified, it is distributed.
, 8. If a project has a To Complete Performance Index (TCPI) of 0.95
based on the BAC, what does this imply?
A) The project must improve efficiency by 5% to meet the budget
B) The project has a 5% cost buffer and can relax efficiency slightly to
meet the budget
C) The project is 5% behind schedule
D) The project is 5% over budget
Answer: B
Rationale: TCPI = (Remaining Work) / (Remaining Funds). A TCPI < 1.0
indicates that the remaining work can be performed with less efficiency
than planned and still meet the budget, meaning there is a buffer.
9. What is the Over Target Baseline (OTB) used for?
A) To increase the contract fee
B) To formally rebaseline the program when the estimated cost exceeds
the contract budget base
C) To reduce the project scope
D) To defer costs to the next fiscal year
Answer: B
Rationale: An OTB is implemented when the total estimated cost to
complete the contract exceeds the Contract Budget Base (CBB). It
establishes a new baseline to reflect the realistic cost to complete.
10. Which of the following best describes the Management Reserve
(MR)?
A) Budget allocated specifically for known risks
B) Budget held by the project manager to address unforeseen risks
within the contract scope
C) Budget used exclusively for profit
D) Budget for contract modifications
BANK: 200 EVM MASTERY QUESTIONS WITH CORRECT
ANSWERS, DETAILED RATIONALES, AND COMPLETE SOLUTION
SETS COVERING ALL EARNED VALUE MANAGEMENT TOPICS
INCLUDING PERFORMANCE MEASUREMENT BASELINES,
VARIANCE ANALYSIS, FORECASTING, INDICES, BUDGETING,
REBASELINING (OTB/OTS), AND INTEGRATED BASELINE
REVIEWS
1. What is the definition of BCWS in Earned Value Management?
A) The total cost incurred for work accomplished
B) The budgeted amount for work scheduled to be completed by a
given time
C) The actual cost of work performed
D) The estimated cost at project completion
Answer: B
Rationale: BCWS stands for Budgeted Cost for Work Scheduled, which is
the planned value (PV). It represents the authorized budget assigned to
the work that is scheduled to be accomplished within a specific time
period.
2. Which formula correctly calculates Cost Variance (CV)?
A) CV = BCWP - ACWP
B) CV = BCWS - BCWP
C) CV = ACWP - BCWP
D) CV = BAC - EAC
,Answer: A
Rationale: Cost Variance is the difference between the earned value
(BCWP) and the actual cost (ACWP). A positive CV indicates the project
is under budget.
3. What does a Schedule Performance Index (SPI) of 1.2 indicate?
A) The project is behind schedule by 20%
B) The project is ahead of schedule by 20%
C) The project is over budget by 20%
D) The project is under budget by 20%
Answer: B
Rationale: SPI = BCWP / BCWS. An SPI greater than 1.0 indicates that
the project is progressing faster than planned, meaning it is ahead of
schedule.
4. What is the primary purpose of an Integrated Baseline Review
(IBR)?
A) To audit the contractor's financial records
B) To verify that the Performance Measurement Baseline is realistic and
covers the full technical scope
C) To approve contract change orders
D) To finalize the project budget
Answer: B
Rationale: The IBR is a joint review between the customer and
contractor to ensure the PMB is achievable, adequately planned, and
includes all the authorized technical work scope.
5. Which type of variance analysis focuses on the difference between
the earned value and the planned value?
A) Cost Variance
,B) Schedule Variance
C) Estimate at Completion Variance
D) Budget Variance
Answer: B
Rationale: Schedule Variance (SV = BCWP - BCWS) specifically measures
the difference between the work actually performed and the work that
was scheduled to be performed.
6. What is the correct formula for Estimate at Completion (EAC) if the
current CPI is expected to continue for the remainder of the project?
A) EAC = ACWP + (BAC - BCWP)
B) EAC = BAC / CPI
C) EAC = BAC / (CPI * SPI)
D) EAC = ACWP + (BAC - BCWP) / CPI
Answer: B
Rationale: When the current cost performance (CPI) is projected to
continue, the most common formula is EAC = BAC / CPI, which
extrapolates the current efficiency to the remaining work.
7. What does the term "Undistributed Budget" (UB) refer to?
A) Budget set aside for unforeseen risks
B) Budget that has not yet been assigned to specific control accounts or
work packages
C) The total contract budget
D) Budget for profit and overhead
Answer: B
Rationale: Undistributed Budget is a temporary holding category for
budget that is authorized but not yet allocated to specific control
accounts or work packages. Once identified, it is distributed.
, 8. If a project has a To Complete Performance Index (TCPI) of 0.95
based on the BAC, what does this imply?
A) The project must improve efficiency by 5% to meet the budget
B) The project has a 5% cost buffer and can relax efficiency slightly to
meet the budget
C) The project is 5% behind schedule
D) The project is 5% over budget
Answer: B
Rationale: TCPI = (Remaining Work) / (Remaining Funds). A TCPI < 1.0
indicates that the remaining work can be performed with less efficiency
than planned and still meet the budget, meaning there is a buffer.
9. What is the Over Target Baseline (OTB) used for?
A) To increase the contract fee
B) To formally rebaseline the program when the estimated cost exceeds
the contract budget base
C) To reduce the project scope
D) To defer costs to the next fiscal year
Answer: B
Rationale: An OTB is implemented when the total estimated cost to
complete the contract exceeds the Contract Budget Base (CBB). It
establishes a new baseline to reflect the realistic cost to complete.
10. Which of the following best describes the Management Reserve
(MR)?
A) Budget allocated specifically for known risks
B) Budget held by the project manager to address unforeseen risks
within the contract scope
C) Budget used exclusively for profit
D) Budget for contract modifications
