Exam 7: Budgeting and Cost Estimation

The advantage of the______ process is that it is generally associated with participative management.

Given a project salary cost of $400,000 per year and forecasted wage increases of 5 percent per year,calculate the nondiscounted total salary cost over a three-year project lifecycle.

The budget process generally begins when the top management invites each division to submit a__________ for the upcoming year.

The authors identify __________ estimation errors as the two types of generic estimation errors.

__________ relies on well-known statistical correlations between various factors such as the total cost of a house relative to the square feet of living are a.

__________ budgeting aggregates income and expenditures by project or program,often in addition to aggregation by organizational unit or activity.

A work element whose cost is fully developed would __________.

The pattern of deviations in cost and usage used for exception reporting to management is called __________.

Suppose that a person requires eight hours to complete a work element on the first attempt.That person has a learning rate of 90 percent for this work element.This person should require __________ hours to complete this work element on the fourth attempt.

A __________ is a plan for allocating resources.The allocation of resources indicates the degree to which different activities of an organization are supported fully.

____ are where the defined responses to the risks are detailed,but their amounts are not yet precisely known.

The project's budget should __________.

Describe the bottom-up budgeting process.

Each time the output doubles,the worker hours per unit decrease to a fixed percentage of their previous value.That percentage is called the __________ rate.

Suppose that a person requires 60 minutes to complete a work element on the first attempt.On the second attempt,the work element is completed in 48 minutes.The learning rate for this person is __________% for this work element. a)80 b)60 c)70 d)120

__________ states that adding manpower to a late software project makes it later.

The traditional organizational budget is __________.

Identify the statement that is not correct regarding a project budget.

A work element in the project plan requires 50 hours of labor each by four carpenters.The carpenters are paid $15 per hour and incur an overhead rate equal to 80 percent of their direct labor charges.The total cost would be __________ if the carpenters consume 10 percent of the workday performing personal activities.

The __________ charge is composed of the costs of senior management,the various data functions,and any other expenses not included in overhead.Often,these charges are a fixed percentage of either the direct costs or the total of all direct and indirect costs.