PMF Budget

PROJECT MANAGEMENT FOUNDATIONS (BUDGET) 1. Which statement best describes project budgeting according to PMBOK principles? A. Recording project expenses after project completion. B. Preparing a financial plan that estimates, allocates, and controls project costs throughout the project life cycle. C. Purchasing all project materials before work begins. D. Approving payments only after all project activities have been completed. 2. Why is a contingency reserve included in a project budget? A. To increase the project's profit margin. B. To pay bonuses to project team members. C. To provide funds for identified project risks and unforeseen cost increases. D. To replace the project manager 3. According to PMBOK principles, what is the most likely effect of increasing a project's approved scope? A. The project schedule and budget will always remain unchanged. B. Additional resources, increased costs, and possible schedule adjustments may be required. C. Project risks are eliminated. D. The project quality will decrease 4. Why are contingency reserves included in a project budget? A. To increase the project's profit. B. To pay bonuses to the project team. C. To provide financial resources for identified project risks and uncertainties that may occur during project execution. D. To replace project equipment 5. Which of the following is classified as an indirect (operational or administrative) project cost? A. Purchase of construction materials B. Salaries of project engineers C. Office internet subscription and utility bills supporting the project D. Rental of heavy construction equipment 6. What is the primary purpose of including a contingency reserve in a project budget? A. To increase the project's overall profit margin B. To provide funds for responding to identified project risks and expected uncertainties C. To reward high-performing project team members D. To replace the approved project budget 7. What is the primary purpose of a Work Breakdown Structure (WBS) during project cost estimation? A. To approve the final project budget. B. To divide the project into smaller work packages that can be estimated more accurately. C. To eliminate project risks D. To monitor project expenses 8. Which statement best describes a project cost baseline? A. It is a record of all expenses paid after the project is completed. B. It is the approved project budget used to measure and control project cost performance during execution. C. It is the contingency reserve set aside for unidentified risks. D. It is a list of suppliers selected for the project. 9. Which of the following is an example of a direct project cost? A. Head office electricity bill shared across all departments B. Annual office building insurance covering the entire organization C. Payment made to engineers working specifically on the project D. Salary of the company's Chief Executive Officer 10. Which statement correctly distinguishes fixed costs from variable costs in project management? A. Fixed costs increase whenever the project scope increases, while variable costs remain unchanged. B. Fixed costs remain relatively constant within a given period, while variable costs change according to the level of project activity or output. C. Variable costs only apply to construction projects, while fixed costs apply to ICT projects. D. Fixed costs are always indirect costs, while variable costs are always direct costs. 11. ____________________ estimating develops the total project cost by estimating each work package individually before combining them into the overall project budget. 12. ____________________ estimating uses the optimistic, most likely, and pessimistic cost estimates to account for uncertainty when preparing a project budget. 13. The approved project budget used as the benchmark for comparing actual project expenditures is called the ____________________. 14. ____________________ is a performance measurement technique that compares planned work, completed work, and actual project costs to assess project performance. 15. A ____________________ reserve is included in the approved project budget to address identified risks that may occur during project execution. 16. Funds used to respond to unforeseen risks that were not identified during project planning are typically provided through the ____________________ reserve. 17. The gradual addition of new project requirements without proper review and approval is known as ____________________. 18. According to PMBOK, the ____________________ is used to break a project into smaller work packages to improve planning and cost estimation. 19. The approved version of the project budget used to measure actual financial performance throughout the project is called the ____________________. 20. According to PMBOK, any significant change to the project budget should normally be evaluated and approved through the ____________________ process before implementation.