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- Sean, a project manager, has to prepare the budget for a new project. He estimates the overall project cost by estimating the costs of the major tasks. He then gives these estimates to Raphael, an engineer who works under Sean, to split up the costs for each of the activities involved in accomplishing the major tasks. In this scenario, Sean is using _____.
A)top-down budgeting
- William, a project manager, needs to prepare the budget for a new software development project. To do so, he takes inputs from other managers who have worked on similar projects in the past. After estimating the overall project cost, he gives the estimates to his team members so that they can split up the cost of each individual task involved in producing the required deliverable. In this scenario, William is using _____.
A) top-down budgeting
- Susan, a project manager, uses a work breakdown structure to list the elemental tasks of a project. She then asks the team members responsible for each of these tasks to give her an estimate of the cost required to accomplish each task. Next, she adds indirect costs such as administrative costs and a reserve for contingencies to the total task cost and files her budget with the accounting department. In this scenario, Susan is using _____.
A) bottom-up budgeting
- Which of the following is not a typical view of cost?
A) When an invoice is posted.
- Samuel, a project manager, and Martha, his subordinate, are working on a project. In the budgeting phase, Samuel is responsible for estimating the costs for Level 1 tasks and Martha is responsible for estimating the costsfor Level 2 tasks. While collating the data, Samuel finds that the total estimated cost for Level 1 tasks is much lower than the total estimated cost for Level 2 tasks. Which of the following is a reason for this discrepancy?
A) Jobs always look easier, faster, and cheaper to the project manager than to the subordinates who have to do them.
- The budgeting approach based on the collective judgments of top and middle managers is called:
A) top-down budgeting
- Which of the following statements is not true about a firm and its project accounting?
A) the project manager must rely on the accounting department to make special allowances for his/her project
- Which of the following is not included in an Agile initial budget?
A) The scrum overhead rate
- The name given to the budget process that aggregates income and expenditures across projects is:
A) program-oriented budget
- Rachel, a project manager, has undertaken a project to build a wall around a compound. She estimates that the cost of materials will be $520 and labor costs will be $10 for 20 hours. If the overheads for this project are 50 percent of the labor and material costs, the total cost will be:
A) $1080.
- Stefan, a project manager in a publishing company, has undertaken a project to translate a book in French into English and to sell a million copies. He estimates that the cost of the materials will be $6000 and the project will require 30 hours of labor at $50 per hour. If the overheads for the project are estimated at a rate of 50 percent of the labor costs, the total cost of the project will be:
A) $8,250
- Victor, a project manager, is constructing a budget for a project to construct a house. He estimates that the materials will cost $100,000 and the project will require 15 people working 6 hours a day to ensure timely completion. He estimates the cost of labor at $15 per hour. Additional costs, safety equipment, and overheads are marked at a rate of 50 percent of direct labor. In this scenario, the total cost of the project will be _____.
A) $102,025
- 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:
A) $1,150
- The first unit requires 10 hours to complete. If the industry uses an 80 percent learning rate, how long should the third unit take?
A) 7.02 hours
- The first unit required 6 hours. If the industry uses a 90 percent learning rate, how long should the fourth unit take?
A) 4.86 hours
- Victoria, an artisan who produces handcrafted furniture, has to carve six ornate chairs to go around a table. It takes her 10 hours to complete the first chair. She estimates that her learning rate is 80 percent. Given this information, Victoria should be able to make the second chair in _____.
A) 10 hours
- Pogmon Solutions, a computer manufacturer, is introducing a new product—a high-end gaming laptop. Its technicians take 21 hours to produce the first unit of the laptop, and the company follows a 78 percent learning curve. Given this information, the eighth unit of the laptop would approximately require _____.
A) 10 hours
- Devon, a project manager, is working on a software development project. He needs more coders to complete the project on time. As a result, he hires people and they are given on-the-job training by their coworkers. However, this significantly reduces the output of the team and leads to a delay in the project. The given scenario exemplifies:
A) the mythical man-month effect.
- There are three basic causes for change in projects and their budgets and/or schedules. Which of the following is not one of these?
A) Inflation causes significant changes to the cost of labor and/or materials.
- There is a 30 percent chance that a new product development project will result in sales of $500,000 and a 70 percent chance that the project will result in sales of $100,0What is the expected value of this project?
A) $220,000
- After major risk are identified which of the following data should NOT be obtained for analysis
A) the person responsible for each outcome
- Project budget is nothing more than the project plan, based on the WBS, expressed in monetary terms.
A) True
- The project’s budget is merely the sum of its resource costs.
A) False
- A budget is a plan for allocating resources to project activities.
A) True
- A key advantage of top-down budgeting is that the overall budget costs can be estimated quite accurately.
A) True
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