Exam 4: Budgeting the Project

A task is expected to take 20 hours of labor at $25 per hour. The required material cost is $500 and the organization charges 30% of direct labor for overhead. The total task cost is:

Define Top-down and Bottom-Up budgeting.

Most organizations use top-down budgeting.

Explain the concept of Brook's "mythical man month"?

Explain how you would use the shape of a project's life cycle to resolve budget conflicts between a superior and subordinate.

Define the term learning rate.

As a project unfolds, the cost uncertainty increases as the project moves towards completion.

The first unit required 6 hours. If the industry uses a 90 percent learning rate, how long should the fourth unit take?

What are the key elements of contingency planning?

The budgeting approach based on the collective judgments of top and middle managers is called:

A problem with bottom-up budgeting is:

Learning curve theory states that performance of labor per unit will improve by a percentage each time production increases by the same percentage.

Reason for cost uncertainty in projects include;

Learning curves can be used to help improve cost estimates.

After major risk are identified which of the following data should NOT be obtained for analysis

Calculating the Tracking Signal can not only reveal if estimates are biased, it can also tell how severe the bias is.

The project budget acts as a project control.

Traditional organizational budgets are task-oriented, rather than activity-oriented.

The best approach to handling change in projects is to accept the negative change and take a loss on the project.

The PMI does not devote much coverage to risk management in the PMBOK