AACE EVP: Analysis and Management Reports

Use this focused AACE EVP page to drill Analysis and Management Reports decisions before returning to mixed practice, timed mocks, and the full PM Mastery question bank.

Topic snapshot

Sample questions

These questions are original PM Mastery practice items aligned to this topic area. They are designed for self-assessment and are not official exam questions.

Question 1

Topic: Analysis and Management Reports

At the May status date, a control account manager submits this variance analysis for a work package that is below its reporting threshold.

Which professional judgment is best supported by the exhibit?

• A. The baseline should be revised immediately so the delayed drawings no longer create a schedule variance.
• B. The risk can be closed because the supplier backlog has been identified and a recovery action has been named.
• C. The mitigation is adequate because overtime directly improves the SPI and CPI shown in the report.
• D. The mitigation is incomplete because it addresses installation recovery but not drawing approval, residual exposure, or measurable follow-up.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: A mitigation plan should connect the corrective action to the root cause, show how remaining exposure will be managed, and define measurable follow-up. Here, the performance problem is driven by unapproved supplier drawings that block installation. Weekend overtime may help recover field work after drawings are released, but it does not resolve the approval backlog. The plan also leaves residual exposure visible: the backlog may continue for four weeks, yet the EAC still assumes normal productivity. A stronger report would identify actions and owners for drawing approval, quantify expected recovery, update the forecast if needed, and define follow-up measures such as drawings approved per week, released work available, installation productivity, and forecast variance trend.

The exhibit shows the root cause is unapproved drawings, while the plan only adds later overtime and lacks quantified tracking or forecast treatment of the remaining exposure.

Question 2

Topic: Analysis and Management Reports

At the June 30 status date, a control account manager submits the following progress report. The approved performance measurement baseline uses a 0/100 earned value rule for each installation work package: 100% EV is earned only when the acceptance test is passed.

Which reporting interpretation is best supported?

• A. The control account is behind schedule but under cost because only two work packages passed acceptance.
• B. Progress is inadequately measured; valid EV is only $400,000, so the control account is behind schedule and over cost.
• C. The control account is ahead of schedule and under cost because all four work packages have installation activity underway.
• D. The control account is on schedule and over cost because reported EV equals PV while AC exceeds EV.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: Under a 0/100 earned value technique, budgeted value is earned only when the defined completion criterion is met. Here, acceptance testing is the completion criterion, and only 2 of 4 equal-budget work packages have passed. Valid EV is therefore $400,000, not the reported $800,000. Compared with PV of $800,000, the work is behind schedule by $400,000. Compared with AC of $950,000, the work is also over cost by $550,000. The main reporting issue is not merely an unfavorable variance; it is that the reported EV is not supported by the approved measurement method.

The 0/100 rule allows EV only for the two accepted work packages, making EV less than PV and AC.

Question 3

Topic: Analysis and Management Reports

At the month 8 status date, a project has crossed its management threshold with cumulative CPI 0.91 and SPI 0.94. The executive steering committee meets tomorrow to decide whether to authorize a recovery action and whether the current EAC remains credible.

Constraints:

• Executives have 20 minutes and want decision implications, not working-level detail.
• Control-account managers have submitted detailed variance narratives and corrective-action owners.
• The scheduler is still validating two logic changes, and accounting is reconciling a small accrual timing difference.
• A formal customer performance report is due next week under a separate reporting format.

What is the best analysis to prepare for the executive meeting?

• A. The full control-account variance package so executives can review each work package narrative and approve individual corrective actions.
• B. The scheduler’s detailed logic report, because unresolved schedule logic must be fully corrected before any executive forecast discussion.
• C. The customer performance report format, because the same earned-value data should be communicated identically to all stakeholders.
• D. An executive decision brief summarizing major variance drivers, forecast impact, schedule-critical implications, data limitations, recommended actions, and decisions required.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Executive earned-value analysis should support management decisions: what is driving the variance, what it means for cost and schedule outcomes, whether the forecast is credible, what actions are recommended, and what approvals or direction are needed. Working-level analysis for control-account managers, schedulers, and accounting is still important, but it serves a different purpose: root-cause detail, corrective-action ownership, schedule validation, and cost reconciliation. The unresolved schedule logic and accrual timing issue should be disclosed as data limitations, not allowed to overwhelm the executive decision. A customer report may require contract-specific formatting and traceability, but it is not automatically the right communication for internal executives.

Executives need concise, decision-oriented analysis that integrates performance, forecast credibility, risks, and required management action.

Question 4

Topic: Analysis and Management Reports

At the month-end status date, a control account reports cumulative PV of $8.0 million, EV of $7.2 million, and AC of $7.8 million. The current period had planned work valued at $900,000, earned $450,000, and incurred $660,000. The control account manager has reduced the EAC from $12.4 million to $11.8 million against a BAC of $11.5 million, citing expected labor recovery and a potential supplier credit. No baseline change has been approved, and the supplier credit has not been recorded by accounting. What is the best management reporting action?

• A. Hold the EAC at BAC until the supplier credit is recorded and all current-period variances have been recovered.
• B. Revise the performance measurement baseline to match the new EAC so the forecast and current report are consistent.
• C. Replace the current-period variance analysis with the improved EAC because the forecast is the best indicator of final performance.
• D. Report the lower EAC, but disclose that it depends on unverified recovery assumptions and an unrecorded supplier credit while highlighting the adverse current-period performance.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: An improving EAC can be valid, but it must be credible and traceable. Here, the current-period CPI is poor because the account earned $450,000 while incurring $660,000, and cumulative performance is also unfavorable. A lower EAC may still be possible, but the stated basis includes expected future recovery and a supplier credit that accounting has not recorded. Management reporting should not hide the adverse current-period signal or treat unverified assumptions as achieved cost improvement. The professional response is to report the forecast with clear caveats, identify the conflict with recent performance, and communicate the evidence needed to support the improvement.

The improved forecast conflicts with weak current-period performance, so it should be communicated with its assumptions, data limits, and management implications clearly identified.

Question 5

Topic: Analysis and Management Reports

At the 31 March status date, a control account has an approved BAC of USD 1,200,000. The cumulative earned value is USD 600,000 and cumulative actual cost is USD 750,000. No approved baseline changes are pending, and the control account manager states that the remaining work is expected to continue at the same cumulative cost efficiency.

Use: CPI = EV / AC; EAC = AC + (BAC - EV) / CPI; ETC = EAC - AC; VAC = BAC - EAC.

Which management report statement best reflects the forecast implication?

• A. The forecast EAC is USD 1,125,000 because the project is 50% complete and has already spent USD 750,000.
• B. The forecast EAC is USD 1,500,000, so management should expect a USD 300,000 unfavorable VAC unless performance improves or scope changes are approved.
• C. The forecast EAC remains USD 1,200,000 because the BAC is the approved baseline and no change has been authorized.
• D. The forecast EAC is USD 1,350,000, so the overrun is limited to the current cost variance of USD 150,000.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: A forecast should distinguish the approved budget baseline from the current estimate of final cost. Here, CPI = EV / AC = 600,000 / 750,000 = 0.80. Since the remaining work is expected to continue at the same cost efficiency, the remaining budgeted work of USD 600,000 is divided by 0.80, producing an ETC of USD 750,000. Adding that ETC to the current actual cost gives an EAC of USD 1,500,000. The VAC is BAC - EAC, or USD 1,200,000 - USD 1,500,000 = -USD 300,000. The professional implication is not to change the baseline automatically, but to report a credible unfavorable forecast and identify corrective action or approved change if needed.

The CPI is 0.80, so the remaining work forecast is USD 750,000, giving an EAC of USD 1,500,000 and an unfavorable VAC of USD 300,000.

Question 6

Topic: Analysis and Management Reports

At the 30 September status date, control account CA-210 has an active risk that a vendor test fixture failure could delay acceptance testing and require outsourced lab support. The control account manager states that the completed mitigation has significantly reduced future exposure.

Project procedure defines:

• Future cost exposure = probability of occurrence × remaining cost impact if the event occurs
• Future schedule exposure = probability of occurrence × remaining workday impact if the event occurs

Which evidence best validates the claimed improvement in future exposure?

• A. The risk event did not occur by 30 September, so the full $500,000 cost impact and 20 workdays should be removed from the forecast.
• B. The mitigation work package had a $50,000 budget and $52,000 actual cost, so the $2,000 overrun is small compared with the original $500,000 impact.
• C. The control account CPI improved from 0.91 to 0.96 during September, indicating that the risk has been controlled.
• D. Future cost exposure decreased from $200,000 to $45,000, and future schedule exposure decreased from 8.0 to 1.8 workdays, supported by completed validation runs.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: A claimed improvement in future risk exposure should be validated with residual risk evidence, not simply current-period cost performance or the fact that the event has not yet occurred. Using the project’s defined method, the original expected cost exposure was 40% × $500,000 = $200,000, and the residual expected cost exposure is 15% × $300,000 = $45,000. The expected schedule exposure similarly decreased from 40% × 20 = 8.0 workdays to 15% × 12 = 1.8 workdays. The completed validation runs provide objective support for the revised probability and impact assumptions. This is stronger evidence than CPI movement, mitigation spending, or optimistic removal of an open risk.

This directly compares pre- and post-mitigation residual exposure using the defined probability-impact method and ties the reduction to objective mitigation evidence.

Question 7

Topic: Analysis and Management Reports

A prime contractor is preparing the monthly customer earned-value report and the internal EAC review. A major subcontractor submitted cumulative data at the status date showing PV = $4.0 million, EV = $3.8 million, AC = $3.6 million, and EAC = $4.5 million. The subcontract represents 25% of the total BAC.

Constraints:

• The contract requires subcontractor performance to be traceable to the approved baseline and objective accomplishment evidence before it is used in customer reporting.
• The approved measurement method is milestone-based; only 3 of 5 equal-weight milestones have accepted completion evidence at the status date.
• The submitted AC excludes a $450,000 accrual for accepted work performed before the status date.
• A $600,000 subcontractor claim is pending negotiation and has not been authorized as a baseline change.

What is the best professional action?

• A. Report the subcontractor’s submitted values this period, then validate milestone evidence and accruals during the next reporting cycle.
• B. Use objective milestone evidence and accrued actuals, exclude the pending claim from the baseline, and qualify the subcontractor forecast until the data is reconciled.
• C. Add the pending claim to the subcontract BAC so the subcontractor’s EAC and baseline remain aligned for the customer report.
• D. Accept the subcontractor’s submitted EV and EAC because the report is due and the subcontractor is accountable for its own performance data.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: Subcontractor data can be integrated into customer reporting and forecast decisions only when it is reliable, traceable, and consistent with EVMS rules. Here, the submitted EV is not fully supported because the approved method is milestone-based and only 3 of 5 equal milestones have accepted evidence. Actual cost is also incomplete because work performed before the status date requires an accrual. The pending claim may affect future cost exposure, but it is not authorized baseline scope and should not be added to BAC or the performance measurement baseline. The appropriate action is to reconcile the subcontractor data, use objective accomplishment and complete actual-cost recognition, and clearly qualify any forecast that depends on unresolved subcontractor information.

This protects customer reporting and management forecasting by using traceable progress, complete actual cost, and only authorized baseline scope.

Question 8

Topic: Analysis and Management Reports

At the month 8 status date, a control account is on the project critical path and is forecast to miss a contractual milestone by 4 weeks unless recovery action is taken.

Additional facts:

• Contract damages for missing the milestone are USD 0.15 million per week.
• A validated second-shift recovery plan would add USD 0.40 million of cost and recover all 4 weeks.
• The plan does not change the expected cost efficiency of the remaining work.
• Use \( \text{CPI} = \text{EV}/\text{AC} \) and \( \text{EAC} = \text{AC} + (\text{BAC}-\text{EV})/\text{CPI} + \text{approved recovery cost} \).

Which management recommendation best balances schedule recovery, mitigation cost, and forecast credibility?

• A. Recommend authorizing the second shift and keep EAC at USD 10.00 million by using management reserve to offset the overrun.
• B. Recommend authorizing the second shift, but report EAC as approximately USD 11.51 million and VAC as approximately USD -1.51 million.
• C. Recommend authorizing the second shift and reset EAC to USD 10.40 million because the milestone date will be recovered.
• D. Recommend rejecting the second shift because a CPI below 1.00 makes any schedule recovery plan unreliable.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: The schedule recovery plan has a favorable near-term schedule and exposure impact: USD 0.40 million avoids USD 0.60 million of contractual damages. However, recovering the milestone date does not erase cost inefficiency already shown by CPI. With CPI = 4.50 / 5.00 = 0.90, the remaining budgeted work is USD 5.50 million. Forecasting that remaining work at the current CPI gives USD 5.50 / 0.90 = USD 6.11 million. Adding current AC of USD 5.00 million and the USD 0.40 million recovery cost gives an EAC of about USD 11.51 million. The professional recommendation should support the recovery action while preserving forecast credibility and clearly reporting the expected cost overrun.

The recovery cost is less than the USD 0.60 million milestone exposure, but the forecast must still reflect the current CPI and the added recovery cost.

Question 9

Topic: Analysis and Management Reports

A controls analyst is preparing the May 31 earned value status for a control account work package with a budget at completion of USD 600,000 for 100 identical panels.

• Planned value through May 31: 60 panels, or USD 360,000.
• Approved EV rule: earn budget only when a panel is installed and inspection-accepted.
• May 31 field evidence: 45 panels inspection-accepted; 10 more installed but awaiting inspection.
• Cost data: USD 390,000 incurred and accrued; USD 300,000 has been paid; USD 180,000 remains committed on purchase orders.
• No baseline change is approved; the control account manager expects to catch up next month.

What is the best May 31 progress-reporting action?

• A. Report EV as USD 390,000 to match the incurred and accrued actual cost because the costs are traceable to the control account.
• B. Report EV as USD 420,000 because 70% of the work package duration has elapsed and the manager expects recovery next month.
• C. Report EV as USD 270,000, use USD 390,000 as actual cost, and explain the unearned installed panels and recovery expectation separately.
• D. Report EV as USD 300,000 based on the paid invoice amount and show the remaining purchase-order commitment as future earned progress.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: Earned progress must be tied to the approved accomplishment criteria, not to time passed, money spent, invoices paid, commitments, or optimism about future recovery. The work package budget is USD 600,000 for 100 panels, so each accepted panel earns USD 6,000. With 45 inspection-accepted panels, EV is USD 270,000. The 10 installed but unaccepted panels may support a narrative about near-term recovery, but they do not earn value under the stated rule. Actual cost is the incurred and accrued cost of USD 390,000; paid invoices and open commitments are different financial facts and should not be substituted for EV. The report should preserve the variance signal and explain the cause and forecast implications transparently.

EV should be based on the 45 inspection-accepted panels under the approved measurement rule, while actual cost and forecast expectations are reported separately.

Question 10

Topic: Analysis and Management Reports

At the 30 September status date, a control account has a budget at completion of $2,500,000. A risk mitigation action for poor installation productivity was implemented on 1 September. The $100,000 tooling and training cost is included in September actual cost and is explicitly nonrecurring. No baseline change has been approved.

Use: CPI = EV / AC; recurring-period CPI = period EV / (period AC - nonrecurring mitigation cost); CV = EV - AC.

Which statement best interprets the mitigation’s effect for management reporting?

• A. The mitigation has not improved prospects because September CPI including all costs is about 0.78, so the mitigation cost should be treated as recurring.
• B. The mitigation has fully corrected the control account because recurring September CPI exceeds 1.00, so the prior cost variance can be removed from history.
• C. The mitigation only explains past variance because cumulative CPI remains about 0.80, so the ETC should continue to use only the cumulative CPI trend.
• D. The mitigation appears to improve future prospects because recurring September CPI is about 1.05, although cumulative CV remains $335,000 unfavorable and should not be erased.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Risk mitigation should be assessed against both historical performance and credible forward-looking evidence. Here, cumulative performance is still poor: cumulative EV is $1,300,000 and cumulative AC is $1,635,000, giving a $335,000 unfavorable cost variance. That past variance remains part of the performance history. However, the September data provide separate evidence about future prospects because the $100,000 mitigation cost is nonrecurring. Removing that one-time cost gives recurring September AC of $285,000 and a recurring-period CPI of about 1.05. That supports a management report saying the mitigation appears to have improved future cost performance, while still disclosing the unfavorable cumulative variance and the basis for any ETC update.

Excluding the nonrecurring mitigation cost, September recurring CPI is $300,000 / $285,000 = 1.05, while cumulative CV remains $1,300,000 - $1,635,000 = -$335,000.

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Related focused pages

• Free AACE EVP Full-Length Practice Exam
• AACE EVP: Organizing
• AACE EVP: Communication Competency
• AACE EVP: Perform Planning and Scheduling Duties
• AACE EVP: Perform Budgeting Duties
• AACE EVP: Account Considerations
• AACE EVP: Revisions and Data Maintenance

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