Free AACE EVP Full-Length Practice Exam: 120 Questions

This free full-length AACE Earned Value Professional (EVP) practice exam includes 120 original PM Mastery questions across the exam domains.

The questions are original PM Mastery practice questions aligned to the exam outline. They are not official exam questions and are not copied from any exam sponsor.

Count note: this page uses the full-length practice count maintained in the Mastery exam catalog. Some exam sponsors publish total questions, scored questions, duration, or unscored/pretest-item rules differently; always confirm exam-day rules with the sponsor.

Format note: this practice set uses selected-response items for communication and memo judgment. It does not ask you to submit or score a written memo.

Need concept review first? Read the AACE Earned Value Professional (EVP) cheat sheet for EVMS baseline integrity, earned value, actual cost, variance analysis, forecasting, data maintenance, and reporting cues before starting the diagnostic.

Exam snapshot

Full-length exam mix

Practice questions

Questions 1-25

Question 1

Topic: Perform Planning and Scheduling Duties

A control account manager is time-phasing the installation work package for the performance measurement baseline. The CPM logic excerpt below is the approved baseline logic for the work sequence.

Which interpretation is best supported by the exhibit?

• A. Tie-in testing controls when installation can be planned because it is the next accepted test record.
• B. The finish-to-start relationship from site receipt to installation controls when installation can be planned to start and earn value.
• C. Installation can be planned to earn value during shipping because the crew may be available before site receipt.
• D. The finish-to-start relationship from factory acceptance test to shipping controls when installation can earn value.

Best answer: B

What this tests: Perform Planning and Scheduling Duties

Explanation: CPM logic defines the authorized sequence used to time-phase planned value and support objective earned-value measurement. In the excerpt, activity M210, Install skid, has a direct predecessor of M130 with a finish-to-start relationship. That means installation is not logically planned to start until shipping and site receipt are complete. Because the installation work package earns value at the signed installation checklist, its planned value should not be placed before the controlling predecessor allows the work to occur. Factory acceptance is an upstream predecessor to shipping, not the direct controlling relationship for installation. Crew availability alone does not override approved CPM logic, and a successor activity such as tie-in testing does not control the planned start of installation.

M210 has an approved finish-to-start predecessor from M130, so installation PV and EV timing should follow completion of site receipt.

Question 2

Topic: Organizing

A control account manager is preparing to release work packages for next month. The approved work authorization document includes fabrication of 40 valve skids under WBS 3.2.1, with budget and schedule baseline loaded for those 40 units. The customer has verbally asked the team to “start preparing” for 10 additional skids that are expected to be added by contract modification next quarter. Engineering has also assumed a different test fixture to improve productivity, but the fixture change has not been approved through configuration control. What is the best professional action before allowing earned value to be claimed?

• A. Release all 50 skids because the customer verbally indicated that the additional work is likely to be added.
• B. Release and measure only the 40 authorized skids, and track the additional skids and fixture change through change control until approved.
• C. Release the 40 skids and the new test fixture because engineering expects it to improve productivity.
• D. Delay all work package release until the expected contract modification for the 10 additional skids is approved.

Best answer: B

What this tests: Organizing

Explanation: Earned value must be claimed against authorized work that is traceable to the approved scope, budget, schedule, and work authorization. In this case, the 40 valve skids are in the approved work authorization and baseline, so they can be released and measured. The 10 additional skids are only a pending change, even though the customer verbally requested preparation. The alternative test fixture is also not authorized because it has not cleared configuration control. Both items may be tracked as change activity, planning assumptions, or risks, but they should not be included in baseline performance measurement or used to claim earned value until properly approved.

Only the 40 skids are authorized baseline scope, while the extra units and fixture change lack formal approval for earned-value performance measurement.

Question 3

Topic: Revisions and Data Maintenance

During an internal EVMS surveillance review, the project controls lead compares the March customer report with the current data-maintenance log for control account CA-220. Values are cumulative, in USD 000s.

Additional review notes: no approved baseline change applies to March or April, no accounting correction was recorded, and no source progress documentation supports a different March accomplishment value.

Which data-maintenance weakness would most undermine EVMS credibility during review, audit, or customer reporting?

• A. The absence of an approved March or April change means management reserve should be released to the control account.
• B. The March report showed unfavorable schedule variance before the recovery plan had been developed.
• C. Prior-period PV and EV were overwritten without approved authorization or source evidence, obscuring the historical variance record.
• D. The actual cost value was retained from the accounting system while the progress and baseline values were updated.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: EVMS data maintenance must preserve traceability between reported performance, approved baseline changes, accounting corrections, and objective progress evidence. Prior-period corrections can be legitimate when they fix documented errors, but they need approval, a clear audit trail, and disclosure when they affect previously reported results. In this case, March PV and EV were restated to match a recovery plan, not to reflect an approved baseline change or supported progress correction. The restatement also changes the historical variance from unfavorable to favorable or neutral, which can mislead reviewers and customers about what was known at the March status date. That weakens confidence in baseline integrity, earned value credibility, and management reporting transparency.

The exhibit shows an unsupported retroactive restatement of baseline and earned value data that changes previously reported performance history.

Question 4

Topic: Revisions and Data Maintenance

At the July 31 status date, a control account manager requests a data-maintenance adjustment. Authorized scope is unchanged, and no change request has been approved. Acceptance testing failed, rework has already occurred, and the revised estimate to complete the remaining authorized work is $1,550,000. Current control account data are: BAC $2,400,000, PV $1,200,000, EV $1,000,000, AC $1,150,000, and management reserve balance $350,000. The manager proposes moving $300,000 from management reserve into the control account BAC in the current period so the forecast no longer shows an overrun. Using EAC = AC + ETC and VAC = BAC - EAC, how should the adjustment be reflected?

• A. Increase cumulative EV by $300,000; report CV $150,000 favorable because the rework effort has been completed.
• B. Charge $300,000 to AC as a July accrual; report EAC $3,000,000 and leave the variance explanation unchanged.
• C. Leave BAC at $2,400,000 and management reserve at $350,000; report EAC $2,700,000 and VAC -$300,000 with rework as the variance explanation.
• D. Move $300,000 from management reserve to BAC; report revised BAC $2,700,000 and VAC $0 because the overrun is now budgeted.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: Baseline changes should be tied to approved scope, budget, or authorized replanning—not used to eliminate unfavorable performance. Here, the scope is unchanged and no change request has been approved. The failed acceptance test and rework are current performance facts that should be explained in variance analysis and reflected in the forecast. The forecast is EAC = AC + ETC = $1,150,000 + $1,550,000 = $2,700,000. The VAC is BAC - EAC = $2,400,000 - $2,700,000 = -$300,000. Management reserve should not be transferred simply to make the VAC zero. EV also should not be increased for rework unless objective earned-value accomplishment criteria were met.

The rework is a performance issue on unchanged authorized scope, so it should update the forecast and variance explanation rather than revise the baseline or consume management reserve.

Question 5

Topic: Analysis and Management Reports

A prime contractor must include a major fabrication subcontract in the month-end earned value report for control account 3.2. Review the subcontract status package.

Which action is best supported before integrating the subcontract into the project EV report?

• A. Add the pending $250,000 change request to the subcontract baseline so the forecast shipment delay is reflected in the current report.
• B. Request WBS-aligned subcontract data for authorized scope, statused schedule activities, time-phased budget, objective earned value, actual cost or accrual basis, and EAC, with the pending change kept separate.
• C. Use cumulative invoices as actual cost and the 70% narrative as earned value because the subcontractor is responsible for its internal budget details.
• D. Report the subcontract as on budget because cumulative payments are less than cumulative invoices and the pending change has not been approved.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: Subcontract performance can be integrated into a project EV report only when the data is traceable to the authorized scope and reporting structure. The package gives contract value, invoices, payments, and a subjective progress statement, but it does not provide enough information to calculate or validate PV, EV, AC, schedule variance, cost variance, or forecast impact. Invoices and cash payments are not automatically actual cost, and narrative percent complete is not a substitute for objective accomplishment criteria. The pending change must remain separate from the performance measurement baseline until approved. The appropriate professional action is to request data aligned to the WBS or control account, including authorized scope, statused schedule, time-phased budget, EV method and earned progress, actual-cost/accrual basis, and EAC.

The exhibit lacks the scope, schedule, budget, actual-cost, and earned-value traceability needed to integrate subcontract performance reliably.

Question 6

Topic: Perform Planning and Scheduling Duties

A control account manager is presenting the proposed schedule baseline for a qualification work package. The project controls procedure says risk mitigation may be in the performance measurement baseline only when it is an approved risk response with WBS/control account budget, objective accomplishment criteria, and schedule logic; schedule reserve must be separately identified and approved.

Which interpretation is best supported by the exhibit?

• A. The mitigation should remain only in the risk register until the test-chamber risk occurs and becomes an issue.
• B. The approved response activities are valid baseline mitigation, but the eight-day lag is hidden schedule margin that should be formally approved and identified or removed.
• C. The entire baseline treatment is acceptable because all inserted time protects the customer demo from an identified risk.
• D. The eight-day lag should be kept in the baseline and earned as progress once the test is complete.

Best answer: B

What this tests: Perform Planning and Scheduling Duties

Explanation: Risk mitigation can be incorporated into an earned value baseline when it represents authorized work or approved schedule reserve that is visible, traceable, budgeted, and logically connected to the plan. In the exhibit, the alternate chamber reservation and pre-test checkout satisfy those conditions: they are tied to an approved response, control account, budget, and schedule logic. The eight-day lag does not. It has no WBS or control-account identity, no budget, no risk reference, and no approval record. Leaving it in the baseline as informal protection would obscure float, weaken schedule credibility, and make variance and forecast analysis less transparent. The proper professional judgment is to preserve the authorized mitigation while either obtaining formal approval and identification for the schedule reserve or removing the hidden margin.

The response activities are traceable and authorized, while the unlabeled lag lacks the required control-account, budget, risk, and approval basis.

Question 7

Topic: Perform Planning and Scheduling Duties

A control account manager submitted a May 31 earned value update for a work package with a budget of $200,000. The approved measurement method is weighted milestones with no partial credit; a milestone earns value only when its objective accomplishment criterion is met by the status date.

The control account manager claimed 70% earned value, or $140,000. Which professional judgment is best supported by the exhibit?

• A. The supported earned value is $150,000 because the readiness review is scheduled and should be credited as near-term progress.
• B. The full $200,000 should be earned because all four milestones have either started or have scheduled completion evidence.
• C. The claimed earned value of $140,000 is supportable because prototype testing has been performed even though failures remain open.
• D. The supported earned value is $100,000 because only the first two milestones met their objective criteria by May 31.

Best answer: D

What this tests: Perform Planning and Scheduling Duties

Explanation: Weighted milestones support earned value only when the approved accomplishment criteria are objectively satisfied at the status date. Here, the design approval and procurement release have documented evidence by May 31, so 50% of the $200,000 work package budget is earned. That supports $100,000 of earned value. The prototype test milestone cannot be earned because the criterion was passing all acceptance tests, and two failures remain open. The installation readiness review also cannot be earned because it is only scheduled after the status date and has no signed minutes. Crediting near-complete, scheduled, or partially successful work would weaken schedule-status integrity and overstate physical accomplishment.

The approved no-partial-credit milestone method supports earning only the 30% and 20% milestones completed by the status date.

Question 8

Topic: Perform Budgeting Duties

At the 30 June status date, a project uses the rule \(\text{contract budget base (CBB)} = \text{performance measurement baseline (PMB)} + \text{management reserve (MR)}\). Contingency inside a control account may be applied only to the identified risk documented for that control account. MR is outside the PMB and may be allocated only by documented management action; it is not used to erase current-period cost variance.

Current budget position before reserve actions:

Status evidence:

• An identified supplier-delay risk in control account CA-220 occurred; the risk register and control-account plan include $75,000 contingency for this risk.
• A customer-approved scope change adds $200,000 of authorized budget, to be held in undistributed budget until detail planning is complete.
• CA-410 has a $60,000 unfavorable cost variance from lower productivity; no baseline change, risk drawdown, or management action has been approved for it.

Which reserve decision is supported at the 30 June status date?

• A. Apply $135,000 of CA-220 contingency for the supplier-delay risk and CA-410 productivity variance, and add $200,000 to MR.
• B. Reduce MR to $265,000 by funding the $75,000 risk, $200,000 scope change, and $60,000 variance from MR.
• C. Hold the approved $200,000 scope change outside the CBB until costs are incurred, and use MR for the $60,000 variance.
• D. Apply the $75,000 CA-220 contingency to the affected work package, add $200,000 to undistributed budget, and leave MR at $600,000.

Best answer: D

What this tests: Perform Budgeting Duties

Explanation: Reserve decisions must be traceable to the type of budget and the authorization basis. The $75,000 is supported because it is contingency already tied to an identified risk in CA-220, so it can be applied within that control account. The $200,000 customer-approved scope change is authorized budget and should increase the CBB and PMB, typically through undistributed budget until detailed planning assigns it. MR remains $600,000 because no documented management action authorizes an MR draw, and the $60,000 productivity overrun is a performance variance, not a reserve justification by itself. After the supported action, the PMB becomes $8,900,000 and CBB becomes $9,500,000, while MR remains unchanged.

The identified risk and approved scope change support the contingency use and PMB increase, while the productivity variance has no approved reserve action.

Question 9

Topic: Analysis and Management Reports

At the June 30 status date, a project has the following cumulative earned value data. Values are in USD millions.

• Performance measurement baseline BAC: 120.0
• Management reserve outside the PMB: 5.0
• PV: 48.0
• EV: 44.0
• AC: 46.4

Use \(CPI = EV / AC\). If current cost efficiency continues, use \(EAC = BAC / CPI\). The project director needs analysis for the quarterly executive review to decide whether senior management action is required. Which analysis is most appropriate for that audience?

• A. Provide each control-account manager with work-package cost-element variances so they can explain the detailed sources of the 2.4 unfavorable cost variance.
• B. Summarize that CPI is about 0.95 and EAC is 126.5, which is 6.5 over the PMB and 1.5 over the PMB plus management reserve, requiring an executive decision on recovery or formal budget action.
• C. Ask accounting to reconcile the 46.4 actual cost balance to invoices, accruals, and payments before any management summary is prepared.
• D. Direct the scheduler to analyze float erosion and late activities because the cumulative SPI is below 1.00 at the status date.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: Executive earned value analysis should translate project-control data into business impact and required decisions. Here, CPI is \(44.0 / 46.4 \approx 0.95\). Continuing that cost efficiency gives \(EAC = 120.0 / 0.948 \approx 126.5\). That forecast is 6.5 above the PMB and 1.5 above the PMB plus management reserve, so the executive-level issue is not the detailed variance mechanics; it is whether to direct recovery, approve a formal budget or funding action, or change management strategy. Working-level groups need different analysis: CAMs need control-account root cause and corrective action, schedulers need logic and float analysis, and accounting needs traceability of actual costs.

Executives need an aggregate forecast, exposure against available budget authority, and a decision-oriented management action.

Question 10

Topic: Analysis and Management Reports

At the 30 June status date, a control account manager is preparing the monthly earned-value report for a work package with a BAC of $200,000. The approved performance measurement rule is objective units complete: each of 100 identical units earns 1% of the BAC only after installation and quality acceptance.

Status facts:

The manager says the package is “about half done” because half the duration has elapsed and several materials are already committed. What should be reported for earned progress, and what is the management meaning?

• A. EV is $140,000; the paid invoices and open commitments show that most of the work is effectively complete.
• B. EV is $100,000; the package is on schedule because 50% of the planned duration has elapsed.
• C. EV is $90,000; earned progress should match the actual costs accrued through the status date.
• D. EV is $70,000; the package is earning less progress than planned, regardless of elapsed time or commitments.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Earned value must be based on the approved physical progress measurement method, not on time elapsed, money spent, invoices paid, commitments, or optimistic narrative. The work package earns 1% of its $200,000 BAC for each unit installed and quality accepted. With 35 accepted units, earned value is 35% × $200,000 = $70,000. Planned value at the status date is 50 planned units, or $100,000. The correct management message is that the package is behind the planned earned progress. Actual costs of $90,000 are relevant for cost performance, but they do not create earned progress. Paid invoices and open commitments may support accounting and forecast review, but they are not physical accomplishment.

Only the 35 accepted units earn value, so EV is 35% × $200,000 = $70,000, which is below the $100,000 planned value.

Question 11

Topic: Analysis and Management Reports

A control account manager is preparing the March earned-value management report. Which interpretation is best supported by the status data?

• A. Increase EV to 1,140 (USD 000s) because the approved mitigation reduces exposure to future rework.
• B. Hold the mitigation outside ETC/EAC until the supplier test cost is actually incurred.
• C. Add 90 (USD 000s) to ETC/EAC and keep EV at 1,050 until acceptance criteria are met.
• D. Move 90 (USD 000s) into the performance measurement baseline and earn it immediately.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: Risk response spending is not earned performance unless it completes work under the approved earned-value measurement criteria. Here, EV is credited only for accepted test procedures. The extra supplier test is planned for next month, has not produced an accepted procedure, and has not changed the baseline. Its estimated cost should therefore be reflected in the remaining forecast, such as ETC and EAC, so management sees the expected cost impact of the mitigation. Crediting EV for risk reduction would overstate physical accomplishment and distort CPI and SPI. If a response later creates authorized new scope or changes the baseline, that would be handled through change control, not by treating the forecasted mitigation cost as earned value.

The mitigation cost is a forecasted cost of future work, while earned value remains tied to accepted test procedures.

Question 12

Topic: Organizing

During a monthly EVMS review, a control account for software integration shows CPI 0.88 and SPI 0.82 at the status date. The approved WBS defines the integration deliverable, but the OBS/RAM lists both Systems Engineering and Test as responsible organizations with no single accountable control account manager. The variance narrative says the delay is caused by “the other group,” and the EAC assumes full recovery without a named corrective-action owner. Baseline changes require change-control board approval. What is the best professional action before finalizing the management report?

• A. Submit a baseline change request to remove the unfavorable variance until Systems Engineering and Test agree on the cause.
• B. Accept the current variance narrative because both organizations are listed in the RAM and the WBS deliverable is already defined.
• C. Retroactively split the control account into two equal parts so each organization can report separate CPI, SPI, and EAC values for the current period.
• D. Identify the ownership gap as a reporting limitation, assign a single accountable control account manager through the RAM/work authorization process, and require a revised variance analysis, corrective action, and EAC basis tied to that owner.

Best answer: D

What this tests: Organizing

Explanation: An EVMS control structure must connect authorized scope to a responsible organization and an accountable manager. When ownership is unclear, variance narratives often become unsupported, corrective actions lack authority, and EAC assumptions become optimistic rather than traceable. The immediate professional action is not to hide or rebaseline the variance, but to disclose the accountability weakness, correct the RAM/work authorization alignment, and require variance analysis and forecast assumptions from the accountable control account manager. This protects baseline integrity while improving report credibility and management actionability.

Clear organizational accountability is needed before the variance explanation, recovery plan, and forecast can be credible.

Question 13

Topic: Analysis and Management Reports

As of the June 30 status date, a control account has the following cumulative data:

The variance analysis says the schedule slip was caused by a temporary access restriction that has now been removed. The cost overrun is from recurring lower labor productivity on installation work, and the remaining scope is mostly the same type of installation work. No approved recovery plan or validated bottom-up estimate exists.

Use these formulas as applicable:

• If current cost efficiency is expected to continue: \(EAC = AC + \frac{BAC - EV}{CPI}\)
• If the variance is atypical and remaining work is expected at budget rate: \(EAC = AC + (BAC - EV)\)
• If both cost and schedule efficiency are expected to affect remaining work: \(EAC = AC + \frac{BAC - EV}{CPI \times SPI}\)

Which forecast is most supportable for the management report?

• A. Use the CPI-times-SPI forecast: ETC $6,875,000 and EAC $11,375,000, with an adverse VAC of $3,375,000.
• B. Use the CPI-based remaining-work forecast: ETC $5,500,000 and EAC $10,000,000, with an adverse VAC of $2,000,000.
• C. Use an unvalidated recovery forecast: ETC $3,900,000 and EAC $8,400,000, with an adverse VAC of $400,000.
• D. Use the atypical-variance forecast: ETC $4,400,000 and EAC $8,900,000, with an adverse VAC of $900,000.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: The appropriate EAC method depends on what the performance data says about the remaining work. Here, the cost overrun is not described as a one-time event; it is a recurring labor productivity trend on work that is similar to the remaining scope. That supports applying the cumulative CPI to the remaining budget. The remaining budget is $8,000,000 - $3,600,000 = $4,400,000. Dividing by CPI gives ETC = $4,400,000 / 0.80 = $5,500,000. Adding AC gives EAC = $4,500,000 + $5,500,000 = $10,000,000. Since BAC is $8,000,000, the VAC is $8,000,000 - $10,000,000 = -$2,000,000. SPI should not be applied because the schedule driver has been removed and is not expected to affect remaining cost efficiency.

The recurring cost productivity problem is expected to continue, while the schedule cause has been resolved, so the remaining budget of $4,400,000 should be divided by CPI only.

Question 14

Topic: Revisions and Data Maintenance

A project controls manager is preparing a message to accompany a corrected May earned value report. The correction is required before the June customer submittal.

Which communication is most appropriate?

• A. Replace the original May report in the shared file so stakeholders use only the current values and avoid confusion.
• B. Submit the June report with the updated cumulative values, but do not call attention to May because the change improved schedule variance.
• C. Describe the correction as a forecast improvement and recommend increasing the June EAC to align with the revised baseline.
• D. Issue a revised May report labeled as a restatement, cite CN-48, show the PV and EV changes and variance impact, and state that the original May report remains in the audit file.

Best answer: D

What this tests: Revisions and Data Maintenance

Explanation: When a retroactive data or baseline change affects a prior earned value report, the communication should be transparent, traceable, and decision-oriented. The corrected report should identify the approved source of the change, explain which prior values changed, show the effect on performance measures, and preserve the original report for auditability. In this case, CN-48 is an approved change with a May effective date, so May PV and EV should be restated while AC remains unchanged. The message should not hide the restatement because the variance improved, and it should not overwrite history without an audit trail. The correction is a baseline/data maintenance action, not a forecast improvement by itself.

This response is factual, traceable to the approved retroactive change, and transparent about the prior-period reporting impact.

Question 15

Topic: Perform Budgeting Duties

At the 30 June status date, control account CA-230 has no approved scope change and no accounting correction in process. The control account manager wants to replace the unstarted July-December planning package with detailed work packages. Work planned through June will remain in the existing work packages.

Current records:

• Authorized BAC in the PMB: USD 1,200,000
• Cumulative PV through 30 June: USD 700,000
• Cumulative EV through 30 June: USD 560,000
• Cumulative AC recorded in the accounting ledger: USD 640,000
• Current EAC in the forecast log: USD 1,420,000

Assume the future baseline budget affected by this planning change is calculated as authorized BAC minus cumulative PV through the status date. Which planning change best protects EVMS traceability across baseline, actual-cost, and forecast records?

• A. Reduce the 30 June PV to USD 560,000 and move USD 140,000 into July-December work packages so schedule variance is removed.
• B. Retain the 30 June PV, EV, AC, BAC, and EAC records; detail the July-December work with USD 500,000 of future baseline budget.
• C. Move USD 80,000 of recorded actual cost into the new July-December work packages so AC aligns more closely with EV.
• D. Increase BAC to USD 1,420,000 and budget the July-December work at USD 780,000 so the baseline matches the current EAC.

Best answer: B

What this tests: Perform Budgeting Duties

Explanation: A planning change that details future work should not rewrite historical performance or accounting records when there is no approved scope change or accounting correction. The authorized BAC remains USD 1,200,000, and the cumulative PV, EV, and AC through 30 June remain traceable to the status record. The future baseline budget affected by the planning change is USD 1,200,000 - USD 700,000 = USD 500,000. The EAC is a forecast record, not a new budget authorization. Preserving these distinctions keeps the PMB, earned progress, actual costs, and forecast mutually traceable while allowing legitimate future planning detail.

This preserves historical performance and actual-cost traceability while replanning only the authorized future baseline budget: USD 1,200,000 minus USD 700,000.

Question 16

Topic: Revisions and Data Maintenance

At the September 30 status cycle, an audit finds that approved change CR-27 was omitted from the August 31 performance measurement baseline. CR-27 was approved by the change control board on July 10 with an effective date of July 1.

August 31 report originally issued:

CR-27 adds BAC of $200,000. Its approved time-phased PV through August is $140,000. Objective accomplishment on CR-27 through August supports EV of $100,000. The $115,000 of actual costs for CR-27 was already included in the August AC above. Use SV = EV - PV and CV = EV - AC.

Which retroactive-change control best preserves the audit trail, approval evidence, baseline history, and management understanding?

• A. Leave the baseline unchanged and move the $115,000 of CR-27 actual cost out of the control account until the next formal rebaseline.
• B. Overwrite the archived August report with the corrected values and remove the original report extract to prevent conflicting management records.
• C. Post all $200,000 of CR-27 BAC and $100,000 of EV in September only, leaving the August baseline and performance report unchanged.
• D. Enter CR-27 as an approved prior-period baseline correction, retain the original August report, and show restated August cumulative values of PV $1,140,000, EV $1,020,000, AC $990,000, BAC $2,200,000, SV -$120,000, and CV $30,000.

Best answer: D

What this tests: Revisions and Data Maintenance

Explanation: An approved change that was effective in a prior period but omitted from the baseline should be handled as a controlled prior-period correction, not hidden in the current period or erased from history. The calculation is cumulative: PV increases by $140,000, EV increases by $100,000, and BAC increases by $200,000. AC stays at $990,000 because the CR-27 actual costs were already included. The corrected August values are PV $1,140,000, EV $1,020,000, AC $990,000, and BAC $2,200,000. Therefore, SV is $1,020,000 - $1,140,000 = -$120,000, and CV is $1,020,000 - $990,000 = $30,000. Preserving the original report, linking the change to its approval, and explaining the restatement gives management a clear and auditable view of what changed and why.

This keeps the approval trail and original history while transparently restating the cumulative baseline and performance values affected by the omitted approved change.

Question 17

Topic: Perform Budgeting Duties

A control account manager submits the following rolling-wave planning change for approval on May 31. All work remains authorized in the contract, and no actual costs have been recorded yet against the existing planning package. Which professional judgment is best supported by the exhibit?

Control note: PMB total is unchanged, and no management reserve is requested.

• A. Condition approval on assigning WP-222 actual-cost collection and distributing the full EAC to the new work packages.
• B. Approve the change and reset the EAC to $600,000 so the forecast matches the revised work-package budget.
• C. Approve the change because the PMB total is unchanged and no actual costs have been recorded against PP-220.
• D. Reject the change because decomposing a planning package into work packages always requires management reserve.

Best answer: A

What this tests: Perform Budgeting Duties

Explanation: A rolling-wave planning change can protect baseline integrity when it converts authorized planning-package scope into detailed work packages without changing the total PMB unless an approved scope or budget change exists. However, EVMS traceability requires more than matching budget totals. Each new work package must connect to schedule activities, budget, authorized work, actual-cost collection, and forecast records. In the exhibit, scope, BAC, and schedule links are mostly preserved, but WP-222 has no issued charge code and part of the EAC remains on the closed planning package. That creates a break between future actual costs, earned value, and the forecast. The proper judgment is to condition approval on completing those traceability links, not to reject valid rolling-wave planning or force the forecast to equal the budget.

The change preserves scope and budget totals, but it does not yet maintain actual-cost and forecast traceability for all replacement work packages.

Question 18

Topic: Analysis and Management Reports

At the 30 June status date, a control account for 20 identical modules has the following earned value rule: each module has a budget of $200,000, and 100% credit is earned only when the module is installed and accepted in integration testing.

The draft performance report shows:

The quality log shows 11 modules installed, but only 8 accepted; 3 failed integration testing and require rework before acceptance. The rework estimate is $450,000 and is not yet included in AC or ETC. Use CV = EV - AC, SV = EV - PV, CPI = EV / AC, and SPI = EV / PV.

Which management-reporting conclusion is most appropriate?

• A. Keep EV at $2,200,000 but add the $450,000 rework estimate to AC, because installed modules have physically progressed even if acceptance is pending.
• B. Revise the baseline PV down to $1,600,000 so the accepted progress aligns with the current technical condition before reporting variances.
• C. Report the control account as favorable because the draft CPI is 1.22 and SPI is 1.10, and track the failed tests as a risk until rework costs are booked.
• D. Do not report the control account as green; accepted EV is $1,600,000, giving CV of -$200,000 and SV of -$400,000, with a quality issue requiring corrective action and forecast review.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Favorable variance can be misleading when earned value is credited before the required technical or quality accomplishment has occurred. The report credited 11 installed modules, but the stated measurement rule requires integration-test acceptance. Only 8 modules qualify, so EV should be 8 × $200,000 = $1,600,000. Against PV of $2,000,000 and AC of $1,800,000, performance is unfavorable: CV is -$200,000 and SV is -$400,000. The failed tests are not merely a future uncertainty; they are a current technical quality issue that affects earned progress and should drive variance analysis, corrective action, and forecast review. Reporting the draft CPI and SPI as green would overstate performance and weaken management decision quality.

Only 8 accepted modules meet the EV rule, so the apparently favorable draft variances are misleading and the failed tests threaten both current performance and future work.

Question 19

Topic: Account Considerations

At the May 31 status date, a control account manager reviews the following EVMS report before approving the monthly forecast.

Reconciliation note:

• The PMB for this control account includes direct costs plus allocated overhead.
• The $450,000 AC reported in EVMS includes only direct labor and material charges.
• Accounting has identified $80,000 of incurred overhead for the same work, but it was posted only at a division summary level and not allocated to the control account.

Which interpretation is best supported by the exhibit?

• A. The variance is primarily a schedule problem because PV exceeds EV; the overhead treatment does not affect CPI or EAC.
• B. The correct action is to remove overhead from the BAC and PMB so the reported CPI remains comparable with direct-cost actuals.
• C. The CPI is valid because indirect costs are not controlled by the control account manager and should be excluded from AC when calculating performance.
• D. The reported CPI and formula EAC are too favorable because EV includes overhead budget while AC excludes incurred overhead; reconcile AC to the same basis before using the variance and forecast.

Best answer: D

What this tests: Account Considerations

Explanation: Earned value comparisons must use a consistent cost basis. If the baseline and EV include an overhead burden, then AC used for CPI, cost variance, and EAC should include the corresponding incurred overhead or a properly supported accrual/allocation. Here, EV is measured against a burdened budget, but AC omits $80,000 of incurred overhead. The reported CPI of 1.20 is therefore overstated; including the overhead would make AC $530,000 and CPI about 1.02. A formula EAC based on the overstated CPI would also be too optimistic. The professional response is not to change the baseline to fit incomplete actuals, but to reconcile indirect cost treatment between accounting and EVMS reporting before drawing variance or forecast conclusions.

The performance measures are distorted because budgeted overhead is included in EV but the matching incurred overhead is missing from AC.

Question 20

Topic: Perform Planning and Scheduling Duties

During baseline planning for a control account, the project controls manager reviews this integrated master schedule excerpt. Which professional interpretation is best supported by the exhibit?

• A. M-310 is at risk because a required external dependency and lead time are not realistically linked to the milestone forecast.
• B. The simulator activity should be removed from the baseline until the purchase order is awarded.
• C. The milestone weighting should be reduced so the control account can earn progress before simulator delivery.
• D. M-310 is credible because earned value will not be claimed until the signed readiness checklist is complete.

Best answer: A

What this tests: Perform Planning and Scheduling Duties

Explanation: A planning and scheduling risk exists when the schedule basis for a baseline milestone does not reflect the work, dependencies, or lead times needed to achieve it. Here, the milestone is a major earned-value point and cannot be completed without the vendor simulator. The schedule forecast still shows the baseline date, but the simulator is not tied to procurement award or the quoted 12-week lead time. That makes the milestone forecast unreliable and could distort the performance measurement baseline if accepted without mitigation. The professional response is to identify the risk, correct the schedule logic, assess the forecast impact, and define mitigation or management action before relying on the milestone for baseline credibility.

The exhibit shows that the readiness milestone depends on vendor simulator delivery, but the schedule omits the procurement dependency and ignores the 12-week lead time.

Question 21

Topic: Revisions and Data Maintenance

During the month 8 EVMS data maintenance cycle, a ledger reconciliation finds that a £180,000 material accrual recorded in month 6 was charged to Control Account B instead of Control Account A. The cost was for authorized work physically performed in Control Account A. Finance and both control account managers have approved the accounting correction.

Constraints:

• The performance measurement baseline, PV, and EV are not changing.
• The accounting procedure requires actual costs to be assigned to the control account where the work was performed and to the period incurred.
• Month 6 and month 7 customer reports have already been submitted.
• The customer has asked whether the correction changes prior variances or the current EAC.

What is the best professional action?

• A. Post the £180,000 as a current-month actual cost in Control Account A so previously submitted variance reports remain unchanged.
• B. Move £180,000 of budget and earned value from Control Account B to Control Account A so the corrected actual cost does not create a cost variance.
• C. Make the ledger correction but omit it from customer variance discussion because total project actual cost is unchanged.
• D. Process the correction with an audit trail, restate the affected prior-period control account variances, update current forecasts using corrected actual costs, and explain the effect in the next report.

Best answer: D

What this tests: Revisions and Data Maintenance

Explanation: A retroactive accounting correction should preserve the integrity of the earned value record. Because the cost was incurred in month 6 for authorized work in Control Account A, the actual cost history and affected control account variances should be corrected with a clear audit trail. Since PV and EV are unchanged and no baseline change is authorized, the performance measurement baseline must not be moved to offset the variance. The current EAC should be reviewed using corrected actual costs and valid remaining ETC assumptions; the project total may or may not change, but the control account forecasts and variance explanations must reflect the corrected data. Stakeholder reporting should be transparent: identify the correction, show the effect on prior variances, state that the baseline was not changed, and explain any current forecast impact.

This preserves data integrity while clearly distinguishing an accounting correction from a baseline change and from current forecast impacts.

Question 22

Topic: Organizing

An EV analyst is reviewing the WBS before approving the performance measurement baseline for a pump-station upgrade. Which WBS boundary interpretation is best supported by the exhibit?

• A. Include the remote monitoring planning package now so the team can earn value if CR-12 is later approved.
• B. Keep the draft WBS because all listed activities support successful pump-station turnover.
• C. Omit commissioning from the WBS because it can be treated as installation contingency until acceptance is complete.
• D. Exclude the owner civil work and pending dashboard, remove duplicate site-readiness scope, and add commissioning as authorized WBS scope.

Best answer: D

What this tests: Organizing

Explanation: A WBS boundary for earned value should reflect the authorized scope of work and provide traceability for each deliverable in the performance measurement baseline. The exhibit shows three boundary problems: owner civil foundation work is outside the contract, the remote monitoring dashboard is only a pending change, and site-readiness support appears in more than one place. It also shows missing authorized scope because commissioning and acceptance testing are part of the contract but are not separately planned. The proper interpretation is to exclude unauthorized or externally funded work, prevent duplicate scope, and ensure every authorized deliverable is represented once in the WBS so earned value cannot be claimed for missing, duplicated, or unapproved work.

This protects the baseline by including all authorized deliverables once and excluding work that is not yet authorized.

Question 23

Topic: Perform Budgeting Duties

At the 31 July status date, Control Account CA-210 has the following approved budget and performance data. Cost variance is calculated as CV = EV - AC. Management reserve is held outside the performance measurement baseline.

There is no approved scope change, no accounting correction, and no transfer of responsibility. The CAM proposes moving $75,000 of budget from WP-2 to the completed WP-1 in the July baseline. This would make WP-1 BAC and EV equal $575,000 and reduce WP-2 BAC to $225,000, while total PMB and management reserve remain unchanged.

How should this proposed budget movement be classified?

• A. Unauthorized replanning because it retroactively moves budget to completed work to eliminate a cost variance without approved change authority.
• B. Budget distribution because total PMB and management reserve would remain unchanged after the movement.
• C. Baseline maintenance because the control account remains within its originally authorized total budget.
• D. Management reserve use because the $75,000 movement offsets the completed work package overrun.

Best answer: A

What this tests: Perform Budgeting Duties

Explanation: WP-1 is complete with EV of $500,000 and AC of $575,000, so its current cost variance is $500,000 - $575,000 = -$75,000. The proposed movement would raise the completed work package BAC and EV to $575,000 and make the variance disappear. Because there is no approved scope change, responsibility transfer, accounting correction, or documented baseline correction, the movement is not legitimate baseline maintenance. It is also not normal budget distribution, since budget distribution should allocate authorized budget to planned work without rewriting completed performance. Management reserve is not being drawn, and MR should not be used simply to erase realized cost overruns. The proper classification is unauthorized replanning because it compromises baseline integrity and performance history.

The movement would change earned value history from a $75,000 unfavorable CV to zero without authorized scope, responsibility, or accounting justification.

Question 24

Topic: Account Considerations

At the March 31 status date, the project controls analyst is reviewing Control Account CA-220 before the monthly earned value report is issued. Which interpretation is best supported by the reconciliation notes?

Reconciliation notes:

• A $60,000 subcontractor invoice was posted to CA-220 on March 29 for April mobilization work; no March work was performed for that invoice.

• Materials costing $40,000 were received and installed by March 31, but no accrual has been recorded because the supplier invoice has not arrived.

• Labor charges and EV accomplishment are supported by March time records and physical progress evidence.

• A. Use the reported AC of $530,000 for the forecast because posted invoices are the controlling source for earned value cost performance.

• B. Increase EV by $40,000 because the installed materials were not included in the accounting system by March 31.

• C. Adjust March AC to $510,000; CA-220 remains in an unfavorable cost variance, but the forecast should be based on reconciled actual costs.

• D. Treat the entire reported cost variance as an accounting timing issue and remove it from the variance analysis narrative.

Best answer: C

What this tests: Account Considerations

Explanation: Actual cost used in earned value reporting should reflect costs applicable to the work performed by the status date and be traceable to the correct period and control account. The April mobilization invoice is a cutoff error for March because the work had not occurred by March 31, so it should not be included in March AC. The installed materials are a missing accrual because the cost was incurred for March work even though the supplier invoice had not arrived. The net correction is $530,000 - $60,000 + $40,000 = $510,000. With EV of $450,000, the corrected cost variance is still unfavorable at -$60,000. The professional response is to reconcile actual costs before interpreting CPI, variance causes, or EAC.

Removing the April invoice and adding the missing March accrual changes AC to $510,000, leaving CV at -$60,000 rather than the reported -$80,000.

Question 25

Topic: Revisions and Data Maintenance

At the February data-maintenance review, an accounting reconciliation finds that a January subcontract accrual of $50,000 was charged to Control Account A but belongs to Control Account B. The January status report has already been issued. No scope was added or deleted, the work packages and earned value methods were correct, and no baseline change was approved.

January cumulative data before correction:

Use: \(CV = EV - AC\). What is the best classification and reporting treatment?

• A. Increase Control Account B’s EV by $50,000 because the corrected accrual shows that more subcontract work was performed there.
• B. Withdraw $50,000 from management reserve to offset Control Account B’s corrected cost variance in the next report.
• C. Correct the actual-cost distribution to A = $570,000 and B = $380,000, preserve PV and EV, and disclose the prior-period accounting correction.
• D. Move $50,000 of budget from Control Account A to Control Account B so both control accounts retain their originally reported cost variances.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: A mischarged accrual is an accounting data correction, not a performance reclassification or baseline revision. The correction moves actual cost from the wrong control account to the right one: Control Account A AC becomes $620,000 - $50,000 = $570,000, and Control Account B AC becomes $330,000 + $50,000 = $380,000. PV and EV remain unchanged because authorized scope, baseline plan, physical progress, and earned value methods did not change. The corrected CVs are A: $540,000 - $570,000 = -$30,000 and B: $380,000 - $380,000 = $0. Because the January report was already issued, the correction should be traceable and disclosed rather than hidden through budget movement, reserve use, or after-the-fact measurement changes.

The $50,000 transfer fixes actual-cost traceability without changing authorized scope, earned progress, or the performance measurement baseline.

Questions 26-50

Question 26

Topic: Analysis and Management Reports

At the June 30 status date, a piping installation control account must be summarized for the monthly management report. BAC is $2,000,000. Use: CV = EV - AC; SV = EV - PV; CPI = EV / AC; SPI = EV / PV; EAC at cumulative CPI = BAC / CPI.

June cause evidence: 20% of welds failed inspection after a late design clarification, causing rework. The clarification has been issued, but no post-correction productivity data will be available until July. The control account manager proposes an EAC of $2,250,000 assuming productivity returns to plan next month.

Which variance explanation best supports the management report?

• A. CV worsened from -$90,000 to -$210,000 and SV from -$80,000 to -$150,000; weld rework is the cause, CPI/SPI are declining, the $2,250,000 EAC depends on unproven recovery versus a CPI-based EAC near $2,400,000, and July productivity should verify the corrective action.
• B. Because the design clarification has been issued, reset June PV and EV to remove the unfavorable history and report the $2,250,000 EAC as the recovery target.
• C. The account is primarily a schedule timing problem because EV is below PV; keep EAC at BAC until the customer approves a baseline change for the design clarification.
• D. The account has a cost overrun of -$210,000 and CPI of 0.83; request additional budget immediately because the rework cost has already occurred.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: A useful variance explanation does more than state the numbers. It connects performance data to the reason for the variance, the direction of the trend, the forecast implication, and the action needed to manage uncertainty. At June 30, CV is $1,050,000 - $1,260,000 = -$210,000 and SV is $1,050,000 - $1,200,000 = -$150,000. Both are worse than May. CPI is about 0.83, so a simple CPI-based EAC is approximately $2,000,000 / 0.83, or about $2,400,000. The proposed $2,250,000 EAC may be reasonable only if the recovery assumption is validated. The report should therefore disclose the rework cause, declining trend, forecast sensitivity, and the corrective action with follow-up evidence.

This explanation links the calculated variances, root cause, adverse trend, forecast uncertainty, and evidence-based corrective-action follow-up.

Question 27

Topic: Perform Planning and Scheduling Duties

Before using a CPM schedule as the time-phased basis for earned-value planning, the planner reviews this excerpt. Project start is day 0. Use a forward pass: for an FS predecessor, successor earliest start is predecessor finish; for an SS+n predecessor, successor earliest start is predecessor start + n. Finish = start + duration. There are no external date constraints.

Physical sequence: the skid cannot be set until both the skid build and the foundations are complete. Which schedule correction best resolves the logic defect before baseline use?

• A. Keep the B-to-D SS+18 relationship and add a start-no-earlier-than day 25 constraint to D; the baseline finish moves from day 33 to day 35.
• B. Remove the C-to-D FS relationship and keep the B-to-D SS+18 relationship; the baseline finish remains day 33.
• C. Increase the B-to-D lag from SS+18 to SS+20, keeping C-to-D FS; the baseline finish moves from day 33 to day 35.
• D. Replace the B-to-D SS+18 relationship with B-to-D FS, keeping C-to-D FS; the baseline finish moves from day 33 to day 35.

Best answer: D

What this tests: Perform Planning and Scheduling Duties

Explanation: The current model lets Activity D start on day 23 because B starts on day 5 and SS+18 gives 5 + 18 = 23. However, B does not finish until day 25, so the current logic allows skid setting to begin two days before the skid build is complete. The correct schedule correction is to replace the B-to-D SS+18 lag with an FS relationship from B to D, while retaining the FS relationship from C to D. Then D starts at max(B finish day 25, C finish day 20) = day 25, finishes day 28, and E finishes day 35. For earned-value baseline use, the schedule should represent physical accomplishment logic, not artificial dates or lags that only happen to work for the current duration.

This ties skid setting to completion of the skid build, preserves the foundation dependency, and produces a logic-driven day 35 finish.

Question 28

Topic: Perform Planning and Scheduling Duties

A control account manager is finalizing the integrated baseline for a critical-path work package. The work has not started, and no trigger has occurred.

Which earned-value planning response is best supported by the exhibit?

• A. Baseline the authorized interim review and keep the alternate fabrication slot as a trigger-based contingency plan.
• B. Take no planning action until April 12 because the event is still only a risk.
• C. Add the 8-day risk impact and 120 contingency hours to the work package baseline because probability exceeds 50%.
• D. Change the work package to level-of-effort measurement so the risk will not create schedule variance.

Best answer: A

What this tests: Perform Planning and Scheduling Duties

Explanation: Earned-value planning should distinguish mitigation from contingency. The interim technical review is an authorized preventive action with planned hours and a scheduled date, so it belongs in the baseline schedule and budget for the control account. The alternate fabrication slot is a contingency plan for a defined trigger: customer comments not received by April 12. Since the trigger has not occurred, the plan should be documented and ready, but not treated as current earned work simply because the probability is high. The risk also cannot be ignored because the work package is on the critical path with no float and has a material schedule impact. The professional response protects baseline integrity while ensuring the risk response is visible, actionable, and traceable to objective trigger facts.

The authorized mitigation should be planned now, while the contingency should be tied to its trigger rather than treated as current earned work.

Question 29

Topic: Organizing

A contractor is preparing an integrated baseline and wants to open WBS element 1.3 as a control account. Review the WBS maturity notes:

Which interpretation is best supported by the exhibit?

• A. The element is not mature; refine it into authorized, deliverable-based scope with clear ownership and objective measurement points before baselining.
• B. The element is mature if the pending vendor interface work is held in management reserve and earned when coordination begins.
• C. The element is mature because a total budget and major resource categories have been identified for the work.
• D. The element is mature provided both listed managers approve the monthly percent-complete value.

Best answer: A

What this tests: Organizing

Explanation: A WBS element that supports earned value control must define authorized scope clearly enough to plan, schedule, budget, assign responsibility, and measure accomplishment objectively. The exhibit shows several maturity weaknesses: part of the scope is not yet approved, the work combines multiple deliverables and level-of-effort activities, accountability is split, the schedule has no measurable interim points, and the proposed EV method relies on subjective judgment. Before release into the performance measurement baseline, the element should be decomposed or clarified so work packages and planning packages are traceable to authorized scope, a responsible manager, objective completion criteria, and time-phased budget.

The exhibit shows pending scope, ambiguous accountability, weak schedule detail, and subjective progress measurement, so it is not ready for EVMS control.

Question 30

Topic: Analysis and Management Reports

As of the May 31 status date, a control account uses an accepted-deliverable earned value method: each accepted test pack earns 100k, and in-process packs earn no value until accepted. Use SV = EV - PV, CV = EV - AC, SPI = EV / PV, and CPI = EV / AC. All values are in thousands of dollars.

The two in-process packs are waiting for late upstream calibration approval. Labor rates and material prices are within 2% of plan, and no rework has been recorded. Which conclusion best identifies the variance type and likely root-cause category?

• A. Unfavorable schedule variance, driven by an accomplishment delay from the late upstream calibration approval
• B. Favorable cost performance, driven by earning more value than the actual cost incurred
• C. Unfavorable cost variance, driven by labor-rate and material-price overruns
• D. Baseline budgeting error, driven by using an accepted-deliverable measurement method

Best answer: A

What this tests: Analysis and Management Reports

Explanation: The planned value is 8 accepted packs × 100k = 800k. The earned value is 5 accepted packs × 100k = 500k. Actual cost is 510k. Therefore, SV = 500k - 800k = -300k, and SPI = 500k / 800k = 0.625, showing a significant unfavorable schedule variance. CV = 500k - 510k = -10k, and CPI is about 0.98, so cost performance is close to plan. The work-status facts point to a schedule or accomplishment root cause: two packs are in process but cannot earn value because late calibration approval prevents acceptance. The data does not support a primary cost-rate, material-price, or rework cause.

EV is 500k versus PV of 800k, creating a large unfavorable SV while CV is only -10k, so the main issue is delayed earned accomplishment.

Question 31

Topic: Perform Budgeting Duties

A project team is preparing the initial performance measurement baseline for an authorized engineering control account. The work authorization is signed, the control account budget is $2.4 million, and execution begins next month. The draft schedule has the correct deliverables but several activities are not logic-linked, two long-duration work packages have only start and finish dates, and the budget has been spread evenly by month to match the finance cash-flow plan. What is the best action before approving the baseline?

• A. Approve the baseline because the total budget is authorized, then correct schedule logic during the first status cycle.
• B. Use the monthly finance cash-flow plan as planned value because it is already aligned with expected expenditures.
• C. Integrate the authorized budget with a logic-supported schedule, define objective earning criteria for the work packages, and time-phase the budget according to planned accomplishment.
• D. Hold the entire budget in undistributed budget until all detailed activities are completed in the scheduling tool.

Best answer: C

What this tests: Perform Budgeting Duties

Explanation: The performance measurement baseline is not just an authorized budget total. It is the time-phased budget plan for authorized work, integrated with the schedule and supported by measurable accomplishment criteria. If activities are not logically connected, long work packages lack interim objective measures, and the budget is spread to match cash flow, planned value will not represent planned physical progress. The professional action is to fix the integration before approval: align the WBS/control account scope to the schedule, establish credible logic and milestones, define how earned value will be claimed, and phase the budget according to when work is planned to be accomplished. Cash-flow and expenditure timing may support funding analysis, but they should not substitute for the performance baseline.

A credible performance measurement baseline requires authorized scope, budget, and schedule to be integrated around planned accomplishment rather than cash flow or unsupported dates.

Question 32

Topic: Account Considerations

A project team is preparing its first monthly earned value report after baseline approval. The EV tool is organized by WBS, OBS, and control account, but the corporate accounting system currently records labor and material actuals by department, general ledger account, and purchase order. Work authorization documents identify the responsible control account manager and authorized WBS element. Finance will not redesign the chart of accounts before the reporting cutoff.

What is the best action to make the actual costs traceable for earned value reporting?

• A. Allocate monthly actual costs to control accounts in proportion to each control account’s percent complete.
• B. Revise the EV control account structure to match the accounting system’s department and general ledger categories.
• C. Create and enforce a charge-code crosswalk that maps accounting transactions, purchase orders, accruals, and labor charges to the authorized WBS/control account structure.
• D. Use cash payments from paid invoices as actual cost until the accounting system can be redesigned.

Best answer: C

What this tests: Account Considerations

Explanation: Earned value actual cost must be traceable from the accounting system to the same authorized work structure used for planning, earning value, and reporting. When the accounting system does not naturally align with WBS and control accounts, the professional control is to establish a disciplined coding or crosswalk mechanism. That link should connect labor, purchase orders, accruals, and other actual-cost transactions to the correct authorized WBS/control account and responsible manager. This preserves accounting integrity while enabling reconciliation between finance records and earned value reports. The link should be controlled, auditable, and used consistently at the transaction or feeder-system level where possible. It should not be replaced by progress-based allocations, cash-payment timing, or a restructuring of the EV baseline to fit accounting convenience.

A controlled charge-code crosswalk links actual costs from the accounting system to authorized work and the EV control account structure without waiting for a chart-of-accounts redesign.

Question 33

Topic: Perform Budgeting Duties

A control account manager is selecting the earned value technique for a budgeted work package before baseline approval. The work will be performed over three months and reported monthly.

Which earned value technique best fits this work package?

• A. Units complete, earning budget only for each harness that passes final acceptance
• B. Subjective percent complete, based on the supervisor’s monthly estimate of fabrication progress
• C. Level of effort, earning value in proportion to the passage of time each month
• D. 50/50 rule, earning half the budget at start and half when the work package finishes

Best answer: A

What this tests: Perform Budgeting Duties

Explanation: The best earned value technique matches how progress can be objectively demonstrated. For repeated, equal-value deliverables, a units-complete method is appropriate when each unit has a clear completion point and acceptance record. Here, each harness has the same budgeted value, and completion is evidenced by serial-numbered test and quality acceptance. That gives a defensible basis for earning value without relying on subjective estimates or labor-hour consumption. The method also protects baseline integrity by preventing value from being earned for partially assembled or rejected units. Techniques that earn value simply because time has passed, work has started, or a supervisor estimates progress would increase measurement risk for this work package.

The work has repeatable equal-value units and objective acceptance evidence, so earned value should be based on the count of completed accepted units.

Question 34

Topic: Account Considerations

At the June 30 status date, a control account manager is reviewing the material lot forecast for cable tray assemblies. The EVMS accounting practice for this analysis is to use accepted receipts, recorded accruals, and allocated freight, not cash paid only.

Assume the remaining 350 units will be purchased at the same loaded actual unit cost as the accepted receipts. Which statement best describes the material-cost implication for management reporting?

• A. Current installed cost is $241.58; material EAC is $241,583 because received cost should be divided by installed units.
• B. Purchase unit cost is $218; material EAC is $218,000, creating an $18,000 unfavorable lot forecast.
• C. Loaded actual unit cost is $223; material EAC is $223,000, creating a $23,000 unfavorable lot forecast.
• D. Earned unit cost is $200; material EAC remains $200,000 because only installed units earn value.

Best answer: C

What this tests: Account Considerations

Explanation: Material cost analysis should follow the accounting basis stated for the status date. Accepted receipts include both the paid 500 units and the accrued 150 units, and allocated freight is part of the loaded material cost. The received lot cost is \(650 \times \$218 + \$3,250 = \$144,950\). Dividing by 650 accepted units gives a loaded actual unit cost of $223. Applying that rate to the full 1,000-unit requirement gives a material EAC of $223,000. Compared with the $200,000 baseline material budget, the forecast lot impact is an unfavorable $23,000. The 600 installed units matter for earned value, but using installed quantity as the denominator would mix cost timing with physical accomplishment.

Accepted receipt cost plus freight is $144,950, so the loaded unit cost is $223 and the full 1,000-unit lot forecasts $23,000 over the $200,000 budget.

Question 35

Topic: Organizing

A control account manager submits the month-end earned value update for a test facility project. The project rule is that earned value may be recorded only for work packages released by a signed work authorization tied to approved scope and budget.

Which work authorization control should be applied?

• A. Accept the $24,000 EV because the shop has objective physical progress.
• B. Withhold EV until the thermal shield is approved, budgeted, assigned to the proper control account, and released by signed work authorization.
• C. Move unused budget from WBS 1.4.2 to the thermal shield and claim EV in the current period.
• D. Record the EV under WBS 1.4.2 because the temporary charge code links the work to an authorized control account.

Best answer: B

What this tests: Organizing

Explanation: Work authorization protects the integrity of the performance measurement baseline by ensuring that only approved scope is released for execution and performance measurement. Physical progress alone is not enough to earn value if the work is outside the authorized baseline. In this case, the thermal shield was requested informally and the change request has not been approved. A temporary charge code and unused budget in a related work package do not create authorized scope. The appropriate control is to stop earned value credit until change control approves the work, assigns it to the correct WBS/control account structure, budgets it, and releases it through formal work authorization.

Earned value should be measured only after the work is within authorized scope, budget, responsibility, and work release controls.

Question 36

Topic: Organizing

A control account manager reports earned value for completed field work at the monthly status date. During review, the project controls analyst finds that part of the reported accomplishment is for added cable routing requested verbally by the site supervisor.

Constraints:

• The added routing is not in the approved work authorization package.
• No approved change notice or revised control account budget exists.
• The EVMS procedure permits earned value only for authorized scope in the performance measurement baseline.
• The customer status report is due tomorrow.

What is the best professional action?

• A. Use management reserve to create budget for the added routing so the current report can include the earned value.
• B. Exclude the added routing from earned value, report only authorized accomplishment, and initiate the required change and work authorization process.
• C. Keep the earned value in the report but add a note that formal authorization is expected next month.
• D. Include the added routing in earned value because the work is physically complete and can be verified in the field.

Best answer: B

What this tests: Organizing

Explanation: Earned value must be traceable to authorized scope released for execution and included in the performance measurement baseline. Physical completion alone is not enough to claim earned value if the work was directed informally and has not passed change control or work authorization. The professional action is to protect baseline integrity: remove or segregate the unauthorized accomplishment from reported EV, report the authorized status accurately, and initiate the required change process so scope, budget, schedule, and responsibility can be formally established if approved. This also prevents double counting, unsupported favorable performance, and loss of audit traceability.

Earned value should be claimed only for formally authorized scope, while the unauthorized work is handled through change control and work authorization.

Question 37

Topic: Perform Budgeting Duties

A control account manager is defining the cost-element budget structure for a new control account before baseline approval. The structure must support actual-cost collection, variance analysis, and the monthly management report.

Which cost-element structure should be used for the control account?

• A. Company labor, subcontract labor, installation labor, material, and travel, with subcontract invoices split into labor and material for reporting.
• B. Labor, material, subcontract, travel, applied indirect burden, and a separate total installed-cost element for management reporting.
• C. Company direct labor, purchased material, subcontract, travel/ODC, and applied indirect burden, with the subcontract PO kept only in subcontract.
• D. Design, build, and site installation, with each work package treated as a cost element for actual-cost collection.

Best answer: C

What this tests: Perform Budgeting Duties

Explanation: Cost elements should be mutually exclusive categories that align with how actual costs are collected and how management needs to analyze variances. In the exhibit, finance provides actual-cost feeds for company labor, material, subcontract, travel/ODC, and applied indirect burden. The subcontract purchase order is posted only as subcontract, even though the subcontractor performs installation labor and supplies material. Therefore, splitting that PO into labor and material, or adding a separate installed-cost total as another cost element, would create double counting or reconciliation problems. WBS work packages remain the scope structure; they are not a substitute for cost-element classification. The best structure preserves traceability from budget to accounting actuals and allows meaningful cost-element variance analysis.

This structure matches the accounting feeds, supports cost-element variance reporting, and keeps each actual cost in a single element.

Question 38

Topic: Analysis and Management Reports

A project director is reviewing the month-end earned value package for a major control account. The control account manager recommends reporting the account as recoverable with no EAC increase.

Status at the data date:

Constraints:

• The current performance measurement baseline is approved and has not been revised.
• A supplier delay change request is logged but not yet approved.
• The remaining work uses the same skilled labor pool, which is already at capacity.
• The proposed recovery plan assumes weekend overtime, but funding and resource approval have not been obtained.

What is the best professional judgment for the management report?

• A. Accept the control account manager’s recommendation because the pending supplier change will likely add budget and reduce the apparent variance.
• B. Delay the management report until the supplier change request is approved so the variance is not overstated.
• C. Report the unfavorable cost and schedule position, separate the pending change from the approved baseline, and require a feasible recovery plan and updated EAC assumption before endorsing recovery.
• D. Keep the EAC at BAC and report the account as recoverable because overtime is a recognized corrective action.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: A management report should distinguish objective performance from assumptions and pending actions. The account is behind plan and over cost: EV is below PV, and AC is above EV. The approved baseline remains the basis for current variance reporting until an authorized change is incorporated. A pending change request may affect future baseline or forecast treatment, but it does not justify suppressing current variance. Likewise, weekend overtime is not a credible recovery basis unless resources, funding, and schedule feasibility are confirmed. The appropriate judgment is to report the unfavorable status transparently, identify the uncertainty around the pending change and recovery plan, and update or qualify the EAC based on supportable assumptions.

The data show unfavorable performance, while the recovery and change assumptions are uncertain and not yet authorized.

Question 39

Topic: Perform Planning and Scheduling Duties

During baseline planning on 1 May, a control account manager is planning WP-310, a field installation work package with a budget of $600,000 and a 60-working-day planned duration. The project rule is that approved mitigation activities that will definitely be performed are time-phased as planned work, while contingency work for an uncertain event is authorized only if its trigger occurs. Risk reserve is calculated as probability × impact.

Management wants the earned-value plan that minimizes expected cost while preserving objective progress measurement. Which response is best?

• A. Exclude the risk from the earned-value plan and wait until the trigger occurs, then record all recovery effort as current-period actual cost.
• B. Add the full 8 working days and $80,000 to the work package baseline now so the team can earn value against the recovery work if needed.
• C. Baseline the 2-day, $18,000 checkout as planned work, keep the factory-test failure as the trigger, and retain residual contingency of 0.3 day and $3,500.
• D. Do not baseline the checkout; hold 2.4 days and $24,000 as contingency because the unmitigated expected exposure is lower than adding planned work.

Best answer: C

What this tests: Perform Planning and Scheduling Duties

Explanation: The planning response should distinguish certain, authorized mitigation work from uncertain contingency work. The unmitigated expected cost exposure is \(30\% \times \$80,000 = \$24,000\), with an expected schedule exposure of \(30\% \times 8 = 2.4\) working days. The mitigation costs $18,000 and fits within available float, so it can be planned without slipping the milestone. After mitigation, the residual expected exposure is \(10\% \times \$35,000 = \$3,500\) and \(10\% \times 3 = 0.3\) working day. The combined expected cost is $21,500, lower than the unmitigated expected cost. In earned-value planning, the mitigation activity can be objectively scheduled and budgeted because it will be performed, while the recovery work should remain tied to the defined trigger rather than being earned before the event occurs.

This treats the certain mitigation as authorized planned work and holds only the residual trigger-based contingency because \(10\% \times 3 = 0.3\) day and \(10\% \times 35,000 = 3,500\).

Question 40

Topic: Perform Planning and Scheduling Duties

A project controls lead is preparing the readiness recommendation for an integrated baseline review on a newly authorized avionics work package. The review package shows these conditions:

• The WBS dictionary and contract scope statement agree on the deliverables.
• The integrated master schedule includes logic through qualification test, and the budget is time-phased to the same status periods.
• The risk register contains two approved mitigation tasks required before qualification test, but neither task appears in the schedule or budget.
• The RAM names engineering as the accountable organization, while the work authorization document names manufacturing as the control account manager.

What is the best professional judgment on IBR readiness?

• A. Accept the package as ready if both engineering and manufacturing agree to attend the IBR and explain their shared responsibility.
• B. Proceed with the IBR because the WBS, schedule logic, and time-phased budget are already aligned for the contract deliverables.
• C. Treat the package as not ready until the mitigation tasks and accountable responsibility are reconciled across the schedule, budget, RAM, and work authorization.
• D. Proceed with the IBR and record the missing mitigation tasks as management reserve until the risks occur.

Best answer: C

What this tests: Perform Planning and Scheduling Duties

Explanation: An integrated baseline review tests whether the performance measurement baseline is credible and executable. Readiness is not shown merely by having a WBS, schedule, and budget. The baseline must integrate authorized scope, objective schedule logic, time-phased budget, identified risks and mitigation plans, and clear organizational responsibility. In this case, approved mitigation work required before qualification test is absent from both schedule and budget, so the plan does not reflect known risk-response work. The responsibility conflict between the RAM and work authorization also weakens control account accountability. The best action is to correct or reconcile these inconsistencies before representing the package as ready for IBR.

An IBR should confirm that scope, schedule, budget, risk, and responsibility form one consistent performance baseline before accepting readiness.

Question 41

Topic: Analysis and Management Reports

At the May data date, a fabrication control account shows cumulative PV of $2.4 million, EV of $2.0 million, and AC of $2.5 million. The variance analysis identifies excessive welding rejects as the main cause. A new fixture and added inspector training were completed in the final week of May. Since then, only 1 of the next 6 planned weld lots has passed first inspection, and no baseline change has been approved. The control account manager wants to lower the EAC from $3.4 million to $3.0 million and state that the issue is fixed.

What is the best professional recommendation for the management report?

• A. Report the mitigation as corrective action, keep the past variance visible, and adjust the forecast only if supported by post-mitigation performance evidence.
• B. Revise the welding baseline budget to remove the reject impact because the corrective action has addressed the problem.
• C. Omit the mitigation discussion until all 6 future weld lots are complete, because one inspected lot is not statistically conclusive.
• D. Lower the EAC to $3.0 million because the root-cause mitigation has been completed before the next reporting cycle.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Risk mitigation or corrective action can explain why performance may improve, but completion of the action does not by itself prove that future productivity or quality has changed. The past cost and schedule variance should remain visible because the rejects already occurred and affected EV and AC. The report should identify the mitigation, explain the limited evidence available after implementation, and avoid an unsupported EAC improvement. If subsequent lots show a sustained lower reject rate, the forecast can then be revised using objective post-mitigation performance data. AACE EVP analysis should protect variance traceability and forecast credibility rather than treating a corrective action plan as demonstrated recovery.

This separates the cause of past variance from evidence needed to support improved future performance and forecast credibility.

Question 42

Topic: Revisions and Data Maintenance

At the June 30 data maintenance review, the control account manager for CA-132 disputes a new unfavorable cost variance and states that one material charge belongs to another WBS element. Which interpretation is best supported by the reconciliation evidence?

• A. The discrepancy is most likely a reporting interface timing error.
• B. The discrepancy is most likely a baseline error requiring a June PMB revision.
• C. The discrepancy is most likely an accounting coding error for voucher V-778.
• D. The discrepancy is most likely a status error because EV is lower than PV.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: Reconciliation should trace a discrepancy to the source record that explains the mismatch. Here, the EV report and accounting ledger agree on the CA-132 actual cost, so the issue is not a report interface failure. The accepted status package supports the earned value, so the issue is not the physical progress status. The baseline log shows no approved baseline change, so revising the PMB would not address the disputed actual cost. The decisive evidence is the voucher support: the transaction was charged to CA-132 even though the PO and receiving report identify WBS 1.4.1. That points to an accounting coding correction, with an audit trail, rather than a baseline, status, accrual, or reporting change.

The voucher was charged to CA-132, while the purchase order and receiving evidence identify WBS 1.4.1.

Question 43

Topic: Analysis and Management Reports

At the month-end review, the project controls manager is preparing the management report for Control Account 3.2. Which interpretation and action is best supported by the exhibit?

• A. Defer variance reporting until the customer-requested test scope is approved because the current EAC may change.
• B. Report the cost and schedule variances with corrective action, disclose that the EAC includes pending scope, and route the test scope through change review before any baseline or reserve action.
• C. Revise the performance measurement baseline to $2,450,000 so the current VAC is eliminated before reporting.
• D. Release management reserve now to cover the $180,000 test-scope forecast because the EAC exceeds the BAC.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: The exhibit supports more than a simple overrun message. The control account has CV = EV − AC = $1,020,000 − $1,360,000 = -$340,000 and SV = EV − PV = $1,020,000 − $1,200,000 = -$180,000. Both exceed 10% of the relevant earned or planned value basis commonly used for variance review, so corrective-action reporting is required. The EAC also includes $180,000 for customer-requested test scope that is not yet authorized in the baseline. That forecast condition should be disclosed, not hidden. Management reserve should not be released for a pending customer scope change unless it is approved and meets the reserve-use rules. The appropriate management response is transparent reporting, corrective action for current performance, and formal change review for the pending scope.

The data exceed variance thresholds, and the forecast contains pending unauthorized scope that must be disclosed and handled through change control.

Question 44

Topic: Analysis and Management Reports

At the month-end status date, the EV analyst is preparing the variance root-cause paragraph for a pipe installation control account. The control account manager wants one statement that management can use to target corrective action.

• The installation work package earns value only for verified units installed.
• Planned progress was 1,000 units installed; verified progress is 800 units installed.
• Labor used 1,120 hours for the 800 installed units, compared with a budget standard of 1.0 labor hour per installed unit.
• All material for 1,000 units was received and charged to actual cost, and a testing subcontract milestone remains incomplete under its 0/100 measurement rule.

Which root-cause statement is most appropriate for the management report?

• A. The variance is mainly a subcontract performance issue because the testing milestone is incomplete, so labor and material effects should be excluded from the root-cause paragraph.
• B. The variance is primarily favorable because all material has been received, so earned value should be increased to reflect the full planned installation quantity.
• C. The variance is a material overrun because actual material cost was booked for 1,000 units, so labor productivity should not be discussed until all units are installed.
• D. The variance is driven by labor productivity below the budget standard, early material actual-cost timing without earned installation progress, and an incomplete subcontract milestone under the 0/100 rule.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: A useful earned-value root-cause statement separates different drivers instead of collapsing them into one favorable or unfavorable label. Here, labor productivity is unfavorable because 1,120 hours were used for only 800 installed units against a 1.0 hour-per-unit standard. Material receipt affects actual cost timing, but the measurement method earns value only for verified installed units, not for material merely received. The subcontract effect is separate because the testing milestone earns no value until complete under its 0/100 rule. A professional management report should preserve these distinctions so corrective action can target labor execution, material cost timing or accrual interpretation, subcontract milestone recovery, and measurement-rule compliance without changing earned value to make the variance look better.

This statement separates productivity, material timing, subcontract status, and the measurement rules that determine earned value.

Question 45

Topic: Analysis and Management Reports

At the month-end data date, a control account manager must integrate a reimbursable subcontract into the customer earned-value report. The subcontract budget at completion is $1,000,000. The approved measurement method earns $100,000 only when each deliverable is accepted by the buyer. Four of ten deliverables are accepted, two have been submitted but rejected for rework, and four have not been submitted. Accounts payable has paid and recorded $800,000 of approved subcontract invoices as actual cost. The subcontractor’s current, supportable forecast to complete all work is $1,150,000, and no baseline change has been approved. What is the best professional reporting action?

• A. Report $600,000 earned value for the accepted and submitted deliverables, and defer the forecast increase until the rework is accepted.
• B. Report $800,000 earned value because 80% of the subcontract value has been paid, and hold EAC at $1,000,000 until all deliverables are due.
• C. Report $400,000 earned value, $800,000 actual cost, keep BAC at $1,000,000, and use the $1,150,000 forecast in the EAC analysis with a clear variance explanation.
• D. Limit actual cost and EAC to $1,000,000 because no baseline change has been approved, and describe the payment status separately.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: Subcontract payment status is not evidence of physical progress or earned value. In this case, the approved earning rule is acceptance-based, so only the four accepted deliverables earn budget: $400,000. The $800,000 paid and recorded by accounts payable is actual cost, not progress. The two rejected deliverables do not earn value until they meet the acceptance criteria. Because no baseline change is approved, the BAC remains $1,000,000; however, forecast data is not the same as baseline budget. A supportable subcontractor forecast of $1,150,000 should be reflected in EAC analysis and explained as a forecast overrun or performance issue.

Accepted deliverables drive earned value, paid invoices drive actual cost, the approved BAC remains the baseline, and the supportable forecast informs EAC.

Question 46

Topic: Account Considerations

A control account’s approved budget includes direct labor plus applied indirect cost using the project’s approved overhead treatment. At the current status date:

• PV is 900,000 and EV is 850,000.
• The control-account cost report shows AC of 700,000 because it includes direct labor only.
• The accounting ledger has posted 175,000 of related indirect cost to a separate project overhead account.
• Prior monthly reports included indirect cost in AC for this control account, and no approved change has been made to the cost basis.

The control account manager wants to report CPI using AC of 700,000 and update the EAC from that CPI. What is the best professional action?

• A. Reconcile the indirect cost to the control account’s AC basis, recompute CPI and EAC, and document the consistent treatment in the variance analysis.
• B. Move the 175,000 indirect cost to management reserve so the control account analysis remains direct-cost only.
• C. Use the direct-labor-only AC because it is the amount shown on the control-account cost report at the status date.
• D. Keep the CPI calculation as proposed, but add a note that indirect cost is tracked outside the control account.

Best answer: A

What this tests: Account Considerations

Explanation: Indirect costs must be treated consistently between the performance measurement baseline, actual-cost collection, and management reporting. If the approved budget includes applied overhead and prior reports included overhead in AC, using direct costs only in the current period would understate AC and overstate CPI. That distorted CPI would also drive an optimistic EAC if used as the forecasting basis. The professional action is to reconcile the accounting ledger and control-account report, include or allocate the related indirect cost on the same basis used for the budget and prior reporting, and then explain the variance using the corrected data. A separate note alone does not fix the analytical distortion, and management reserve is not a place to park normal indirect actual costs.

CPI, EAC, and variance analysis must use a cost basis consistent with the budget and prior actual-cost treatment.

Question 47

Topic: Communication Competency

An EVP is reviewing a brief status memo for a program sponsor who is not an EVMS specialist and must decide whether to authorize recovery funding next week.

• Status date: May 31
• Cumulative PV: 4.8M; EV: 4.0M; AC: 4.6M
• Variances exceed the reporting threshold; the documented driver is a late design release
• A 350k change request is pending approval, and accounting is checking a possible 120k missing accrual

Which draft statement is LEAST suitable for the sponsor memo?

• A. At May 31, the project is behind plan and over cost because EV is below PV and AC is above EV; the late design release is the documented driver.
• B. For the sponsor, summarize CPI and SPI in plain language and identify the decision needed after change and accounting impacts are confirmed.
• C. The memo should separate approved performance results from the pending change request and the unresolved accrual review.
• D. Performance should recover once the pending change is added, so the sponsor can assume the cost and schedule variances are temporary.

Best answer: D

What this tests: Communication Competency

Explanation: Professional EVMS communication should be factual, evidence-backed, audience-appropriate, and clear about what is known versus unresolved. The supplied data support a simple message: EV is less than PV, indicating schedule performance weakness, and AC is greater than EV, indicating cost performance weakness. The documented driver is the late design release. However, the pending change request and possible missing accrual are not yet approved or reconciled, so they should not be used to dismiss the variance or promise recovery. A sponsor memo should clarify the decision need without burying the message in technical detail or overstating certainty.

This statement is unsupported and inconsistent with the facts because the change is not approved and the accounting impact is still unresolved.

Question 48

Topic: Revisions and Data Maintenance

A project has an approved baseline change after the October status update. The customer performance report is due in two business days, and the draft report was prepared before the change-control board decision.

Which communication is most appropriate before the customer report is released?

• A. Tell the Test CAM to include the added work in the forecast, but leave the customer report unchanged until the next reporting cycle.
• B. Notify the affected CAMs, finance, and reporting lead of the approved responsibility transfer, reserve allocation, actual-cost reconciliation need, and customer-report disclosure.
• C. Tell finance to move the October actual costs and prior earned value to the Test control account without mentioning the baseline change.
• D. Tell the reporting lead to describe CR-108 as a cost variance recovery action rather than a baseline revision.

Best answer: B

What this tests: Revisions and Data Maintenance

Explanation: An approved change that changes control-account responsibility and uses management reserve is not just a forecasting note. It changes the maintained baseline structure and must be communicated to the people who control the work, record actual costs, and prepare customer-facing performance data. The communication should identify the approved change, the effective responsibility transfer, the management reserve allocation, the need to reconcile actual costs charged to the old control account, and the required disclosure in the customer report. This preserves traceability between the change log, RAM/control-account structure, accounting records, reserve balance, and reported baseline. It also avoids misstating performance by treating a baseline revision as a variance recovery or by leaving the customer with obsolete reserve and responsibility information.

The approved change affects control-account ownership, management reserve, accounting traceability, and the customer report, so all affected parties need a clear baseline-maintenance communication.

Question 49

Topic: Revisions and Data Maintenance

At the April 30 status close, project controls prepared this reconciliation note for Control Account 3.2 before issuing the monthly customer earned value report and updating the EAC. The contract requires customer reports to reconcile the baseline, status, and accounting data as of the data date.

Which professional judgment is best supported by the exhibit?

• A. The data is not reliable enough for customer reporting or EAC update until status evidence, accounting traceability, and ETC are corrected.
• B. The data is reliable for customer reporting because the baseline excludes the pending trend and the ledger is closed through the data date.
• C. The data is reliable for EAC update because the draft report manually corrects the control account charge before calculating CPI.
• D. The data is reliable for customer reporting if the two missing work packages remain at EV = PV until the CAM provides status.

Best answer: A

What this tests: Revisions and Data Maintenance

Explanation: Reliable reconciled earned value data must be traceable across the approved baseline, objective status, accounting actuals, and forecast assumptions. The baseline treatment is sound because the pending trend is excluded, but the other exceptions are material. Setting EV equal to PV without objective CAM status weakens physical progress credibility. Manually moving USD 95,000 in the report before the accounting correction posts creates a traceability gap between the report and the general ledger. Using a prior-month ETC while a supplier delay has already affected the test work packages makes the EAC incomplete. The appropriate professional judgment is to hold the final customer report and forecast update, or clearly qualify internal analysis, until the missing status evidence, posted accounting correction or approved reconciliation trail, and updated ETC are available.

Unsupported EV, an unposted accounting correction, and a stale ETC prevent the reconciled data from supporting final reporting or forecast update.

Question 50

Topic: Perform Planning and Scheduling Duties

During baseline planning for an EVMS-controlled development project, the control account manager defines a work package as: “Perform vibration qualification test for the pump skid and issue the approved test report.” The requirement allocated to the work package is vibration not to exceed 0.25 in/sec RMS at three specified operating points. Earned value for the work package will be claimed only when objective completion evidence is available. The proposed technical performance measure is: “Pump skid vibration performance is acceptable based on engineering judgment.” What is the best professional action?

• A. Revise the measure to record the tested vibration value at each specified operating point and require the approved test report as completion evidence.
• B. Accept the measure because engineering judgment is appropriate for development work where test outcomes may vary.
• C. Expand the measure to include long-term field reliability because it gives management a broader view of pump skid performance.
• D. Replace the measure with percent of test labor hours used because labor consumption is available from the schedule status update.

Best answer: A

What this tests: Perform Planning and Scheduling Duties

Explanation: A technical performance measure used for earned-value planning should describe the required technical outcome in objective terms and tie it to the work package definition. Here, the work package is limited to performing a vibration qualification test and issuing an approved test report. The allocated requirement already provides measurable criteria: a maximum vibration value at three operating points. The best action is to define the measure around those observed test results and the approved report. Subjective judgment, labor consumption, or broader reliability outcomes would not provide the same direct, auditable evidence of completing the authorized work package.

This makes the measure specific, measurable, and directly aligned with the work package scope and completion evidence.

Questions 51-75

Question 51

Topic: Analysis and Management Reports

At the current status date, a control account has BAC = $4,000,000, EV = $1,600,000, and AC = $1,950,000. The cumulative CPI is 0.82, but the last three reporting periods after a documented methods change have CPIs of 0.97, 1.01, and 0.99. The remaining work is repetitive installation work using the corrected method, and there is no approved scope change or baseline revision. Management needs a defensible EAC for the monthly customer report. What is the best forecasting approach?

• A. Develop the ETC using the recent demonstrated performance rate for the remaining work, then add it to AC for the EAC.
• B. Revise the baseline to remove the early overrun before calculating ETC so the customer report reflects current performance.
• C. Forecast EAC by applying the cumulative CPI of 0.82 to all remaining budget because cumulative CPI is always the best predictor.
• D. Set EAC equal to BAC because the corrected method shows the control account is now performing near plan.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: EAC should reflect both actual performance already incurred and the most credible assumption for the remaining work. Here, the early adverse cost performance is real and remains in AC. However, the scenario states that a documented methods change has produced stable recent CPI near 1.0 and that the remaining work is repetitive installation using that corrected method. A defensible approach is therefore to calculate ETC from the recent demonstrated performance rate for the remaining work and add it to AC. This avoids overstating future inefficiency by blindly extending the old cumulative CPI, while also avoiding the improper removal of historical cost variance.

The remaining work is expected to follow the corrected recent trend, while the prior overrun must remain captured in AC.

Question 52

Topic: Revisions and Data Maintenance

During the May closeout review, the project controls analyst finds that April actual costs of $85,000 were posted to the wrong control account. The accounting manager confirms the cost belongs to the same contract but to a different control account. The April customer report has already been issued, and there is no approved scope or budget change. Which documentation package best supports correcting the May EVMS database without obscuring April performance history?

• A. A revised April baseline file, a new control account budget spread, and a variance narrative stating that the April cost variance is no longer applicable
• B. Accounting source evidence, correction approval, a clear audit trail of the April and May values, and a report note explaining the prior-period correction’s effect on cumulative performance
• C. A May journal entry total and a management instruction to adjust cumulative actual cost without changing the published April report package
• D. A forecast update showing the revised EAC and a trend log entry documenting that the control account manager expects no future cost impact

Best answer: B

What this tests: Revisions and Data Maintenance

Explanation: A prior-period correction should be supported by evidence that shows what was wrong, who authorized the correction, what values changed, and how the change affects previously reported and current cumulative performance. Because the April report was already issued and no scope or budget change exists, the correction should not be treated as a baseline revision or used to erase the original performance history. The proper package preserves the audit trail between accounting records, control account actual costs, and management reporting. It also gives stakeholders a transparent explanation of the prior-period effect so current CPI, CV, EAC, and variance narratives can be interpreted correctly.

This supports the accounting correction while preserving traceability to the original reported period and explaining the effect on performance data.

Question 53

Topic: Revisions and Data Maintenance

During month-end reconciliation for the June 30 earned-value report, the EV analyst finds:

• Draft control account values: PV = $1,000,000, EV = $900,000, AC = $820,000.
• Accounting confirms a valid June vendor accrual of $240,000 was posted by cutoff but omitted from the EVMS because an account-to-control-account interface map failed.
• The PMB and physical progress status are verified; no approved baseline change exists.
• The customer report has not been submitted. Procedure requires a cost-variance narrative when absolute CV divided by EV exceeds 10% and requires interface failures to be raised to the controller and EVMS lead.

What is the best action before the report is issued?

• A. Revise AC to $1,060,000, include the required cost-variance narrative, and raise the interface failure for process correction.
• B. Issue the draft report because the accrual is in accounting but was not in the EVMS at the status cutoff.
• C. Move $240,000 of budget from management reserve to the control account to offset the unfavorable variance.
• D. Keep the draft values and ask the controller to correct only the interface map after the reporting cycle.

Best answer: A

What this tests: Revisions and Data Maintenance

Explanation: Reconciliation should protect the integrity of the current report and the control process. The accrual was valid for the June cutoff, so AC must be corrected from $820,000 to $1,060,000. With EV of $900,000, CV becomes -$160,000, which exceeds 10% of EV and triggers the required variance narrative. Because the PMB and physical progress are verified, this is not a baseline or earned-progress problem. The failed interface map is a process issue, so it should be escalated to the roles named in the procedure for correction and recurrence prevention. Since the customer report has not yet been submitted, issuing the corrected report is preferable to sending known inaccurate performance data.

The reconciliation identifies a valid actual-cost omission that changes reportable performance and also exposes a process defect requiring correction.

Question 54

Topic: Analysis and Management Reports

At the June 30 status date, a subcontract control account has a BAC of $1,000,000 for five identical skid assemblies. The approved EV rule earns $200,000 only when an assembly passes technical acceptance; no partial EV is earned for installed but unaccepted work. The baseline planned four accepted assemblies by June 30.

Cumulative records show:

• Subcontractor monthly report: 80% complete
• Cost record: $760,000 accrued as actual cost
• Technical acceptance log: 3 assemblies accepted, 1 installed but failed acceptance, 1 not delivered

Using SV = EV - PV and CV = EV - AC, what should be reported for subcontract performance?

• A. Report PV = $800,000, EV = $600,000, AC = $760,000; identify negative SV of -$200,000 and negative CV of -$160,000, with variance analysis required.
• B. Report PV = $800,000, EV = $0, AC = $760,000; identify no earned progress until all five assemblies are accepted.
• C. Report PV = $800,000, EV = $760,000, AC = $760,000; identify a small schedule variance and no cost variance.
• D. Report PV = $800,000, EV = $800,000, AC = $760,000; identify the subcontract as on schedule and under budget.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Subcontractor progress should be integrated using objective accomplishment evidence that matches the approved earned value technique. The plan allows $200,000 of EV only for each assembly that passes technical acceptance. By the status date, three assemblies have been accepted, so EV is $600,000. The baseline planned four accepted assemblies, so PV is $800,000. Actual cost is the accrued $760,000 from the cost record. Therefore, SV = $600,000 - $800,000 = -$200,000, and CV = $600,000 - $760,000 = -$160,000. The professional response is to report both schedule and cost performance concerns and require variance analysis and forecast review, especially because one installed assembly failed acceptance.

Earned value is based on the three technically accepted assemblies, not the subcontractor’s self-reported percent complete or the accrued cost.

Question 55

Topic: Analysis and Management Reports

At the 30 June status date, a control account has these cumulative values:

Additional facts:

• AC includes a $45,000 risk mitigation activity that was authorized in the control account plan, budgeted in the PMB for June, and completed as planned.
• The CAM attributes the physical progress shortfall to lower-than-planned weld productivity.
• No scope change, baseline change, or management reserve transfer has been approved.
• The remaining-work forecast is $30,000 higher than the remaining baseline budget because the weld productivity trend is expected to continue.

Use CV = EV - AC and EAC = AC + ETC. Which management-report statement best interprets the mitigation-related information?

• A. Report the mitigation as a management reserve transfer; increase the control account budget by $45,000 to offset the AC impact.
• B. Report the mitigation as the variance explanation; remove $45,000 from AC and report the adjusted CV as -$15,000.
• C. Report the forecast increase as a baseline change; increase BAC to the new EAC so the variance at completion is zero.
• D. Report the mitigation as an executed risk response; report CV as -$60,000, and show the $30,000 remaining-work increase as a forecast adjustment with no baseline or reserve change.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: A planned mitigation activity is a risk response action, not automatically a variance explanation, baseline change, reserve transfer, or forecast adjustment. Here, the $45,000 mitigation was already authorized, budgeted in the PMB, and completed as planned, so it should remain in AC and be described as executed mitigation. The current cost variance is EV - AC = $810,000 - $870,000 = -$60,000. The stated cause of the performance shortfall is lower weld productivity. The forecast effect is separate: the remaining work is expected to cost $30,000 more than the remaining baseline budget, so that belongs in EAC/ETC analysis. Because no baseline change or management reserve transfer has been approved, the report should not revise BAC or move reserve to improve the variance picture.

The mitigation was authorized and completed as planned, while the unfavorable cost variance and higher EAC are driven by performance and forecast data, not by an approved baseline or reserve action.

Question 56

Topic: Account Considerations

A control account manager is preparing the April 30 earned value status for CA-240. The measurement rule earns budget only for assemblies accepted by quality inspection by the status date.

Which interpretation is best supported by the exhibit?

• A. PV is $450,000, EV is $400,000, and reconciled AC is $410,000 after the accrual and mischarge correction.
• B. PV is $450,000, EV is $430,000, and AC is $360,000 because delivered units and posted costs are sufficient for April reporting.
• C. PV is $450,000, EV is $400,000, and AC is $360,000 because only costs already posted in the ledger should be reported.
• D. PV is $400,000, EV is $400,000, and AC is $410,000 because the baseline should be adjusted to match accepted units.

Best answer: A

What this tests: Account Considerations

Explanation: Earned value reporting must align the baseline, physical status, and actual cost cutoff for the same control account and status date. Planned value comes from the approved time-phased baseline: 450 planned assemblies at $1,000 each, or $450,000. Earned value follows the stated measurement rule, so only 400 quality-accepted assemblies earn budget, or $400,000; May 2 deliveries are outside the April 30 cutoff and were not accepted. Actual cost must be reconciled to the work performed for the control account at the same cutoff. The posted $360,000 is incomplete because accepted April subcontract work requires a $70,000 accrual, and it is overstated by a $20,000 mischarge belonging to another control account. The reconciled AC is therefore $410,000.

The status date, acceptance rule, accrual, and mischarge support PV of 450 units, EV of 400 accepted units, and AC of $360,000 + $70,000 - $20,000.

Question 57

Topic: Organizing

A project team is building the EVMS control structure for a fixed-scope engineering and fabrication contract. The approved WBS is deliverable-oriented, and management wants the OBS finalized before the responsibility assignment matrix is baselined.

Constraints:

• Each control account must have one accountable control account manager.
• Engineering, Procurement, Fabrication, and Test are the organizations that own budgets and actual-cost collection.
• The customer wants earned value reported by major deliverable without assigning organizational accountability to deliverable names.
• Functional managers may support multiple WBS elements.

Which OBS structure is the best professional choice?

• A. A list of customer report categories, with accountability assigned to the report owner for each major deliverable.
• B. A copy of the WBS arranged by major deliverable, with each deliverable used as an OBS element for reporting.
• C. A hierarchy of accountable performing organizations, with control account responsibility assigned where each organization intersects the WBS.
• D. A staffing chart by individual engineer and craft lead, with each person assigned directly to all related work packages.

Best answer: C

What this tests: Organizing

Explanation: In an earned value control structure, the WBS defines the scope of work, while the OBS defines the organizations accountable for performing that work. The responsibility assignment matrix then connects the two, typically creating control accounts at the intersection of a WBS element and a responsible organization. Because the contract already has a deliverable-oriented WBS and the accountable budget and actual-cost owners are Engineering, Procurement, Fabrication, and Test, the OBS should be organized around those performing organizations. Customer reporting by deliverable can still be achieved through the WBS and reporting structure, but it should not redefine organizational accountability. A staffing list may support work authorization and resource planning, but it is too granular and unstable to serve as the OBS for accountable organizational ownership.

The OBS should identify responsible organizations so the RAM can link accountable ownership to WBS scope without turning deliverables into organization names.

Question 58

Topic: Analysis and Management Reports

A prime contractor is preparing the monthly customer earned-value report and the management EAC review. The largest subcontractor submitted the following status package for the same data date.

Which interpretation is best supported before integrating the subcontractor data into the customer report and management forecast?

• A. The submission is reliable for customer reporting if the pending change request is added to BAC before calculating variances.
• B. The submission is reliable because the subcontractor’s EV exceeds PV and its EAC remains equal to BAC.
• C. The submission is not reliable as provided; reconcile EV to accepted progress, AC to accrual-based cost, and EAC to the current trend before using it for reporting decisions.
• D. The submission should be accepted for the customer report, but the management EAC should use only the cash-paid AC value.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: Subcontractor performance data must be traceable to objective progress, compatible actual-cost cutoff rules, and a credible forecast basis before it is integrated into customer reporting or management EAC decisions. Here, the subcontractor claimed EV of $3,000,000, but the prime verified only $2,200,000 of accepted physical progress. The reported AC is cash paid, not the accrual-based cost of work and received material, so it understates actual cost for earned-value analysis. The EAC remains at BAC even though the verified trend supports $4,700,000, and the subcontractor narrative includes a pending change that is not approved or in the baseline. The professional response is to reconcile and qualify the data, not to report favorable metrics that are unsupported by objective evidence.

The exhibit shows unsupported EV, incomplete AC, an unchanged EAC despite adverse productivity, and a pending change treated as if it were approved.

Question 59

Topic: Analysis and Management Reports

At the May status date, a control account shows PV of $2,400,000, EV of $2,000,000, and AC of $2,100,000. The schedule variance exceeds the reporting threshold. The control account manager’s draft narrative says, “Supplier delay is being mitigated by expediting; no further management action is needed.”

Reporting constraints:

• The customer report may describe a mitigation as effective only when the variance cause, risk owner, response status, and residual exposure are supported.
• The risk register lists “late supplier tooling” with owner TBD and no response status.
• The schedule update still shows tooling delivery three weeks late; an expediting purchase order was issued yesterday, but no recovery date has been accepted.
• The variance narrative does not distinguish between late design release and supplier capacity as the primary cause.

What is the best professional action before issuing the report?

• A. Remove the variance from the customer report until the risk register owner and response status are completed.
• B. Report the item as an unresolved variance and require a revised narrative that identifies the supported cause, accountable owner, response status, and residual exposure.
• C. Revise the schedule forecast to show recovery based on the expediting action and keep the mitigation wording unchanged.
• D. Report the mitigation as effective because the expediting purchase order shows that a corrective action has started.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: Mitigation reporting must be traceable to evidence, not just activity. In this case, the variance is real and above threshold, but the claimed mitigation is unsupported. The cause is not clear, the risk owner is not assigned, the response status is blank, and residual exposure remains because the schedule still shows a three-week delay with no accepted recovery date. The appropriate action is to report the variance transparently and require a corrected analysis before describing the mitigation as effective. Starting an expediting purchase order may be a response activity, but it does not prove recovery or define remaining risk exposure.

The mitigation claim is not supportable because the required cause, ownership, response status, and remaining exposure are not yet evidenced.

Question 60

Topic: Analysis and Management Reports

At the April status date, the project controls lead is preparing the variance narrative for a mechanical control account. The control account manager provided this excerpt:

• Schedule variance cause: pipe support fabrication released two weeks late after late vendor drawings.
• Cost variance cause: overtime used to recover field installation sequence.
• Risk response note: add an extra fit-up inspection before next month’s critical welds to reduce the likelihood of rework; cost will be managed within the existing control account forecast.

Which interpretation is best supported for the management report?

• A. Describe the extra fit-up inspection as the root cause of the current cost and schedule variances.
• B. Treat the extra fit-up inspection as a risk mitigation action, while reporting the late drawings and overtime as the variance causes.
• C. Record a management reserve transfer because the inspection is a risk response activity.
• D. Process a baseline change because the inspection changes the performance measurement baseline.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: A mitigation action is a planned response intended to reduce the probability or impact of a future risk. It should not be confused with the explanation for a variance that has already occurred. Here, the current schedule and cost variances are explained by late vendor drawings and overtime. The proposed extra fit-up inspection is a forward-looking action to reduce the chance of weld rework next month. The exhibit also states that there were no approved baseline changes and no management reserve movement, so the report should not imply a baseline revision or reserve transfer. The EAC has already been stated separately; the mitigation note supports risk and recovery discussion, but it is not itself proof of a baseline change or a different variance cause.

The exhibit identifies the inspection as a future risk response, while the actual variance causes are late drawings and overtime.

Question 61

Topic: Perform Budgeting Duties

A control account work package has a budget at completion (BAC) of USD 180,000 to install and acceptance test 90 identical supports. The approved performance measurement rule is:

\(EV = (\text{accepted installed supports} / 90) \times \text{BAC}\)

At the status date, 45 of 60 planned workdays have elapsed, USD 110,000 of actual cost has been recorded, 36 supports are installed and accepted, and 9 additional supports are fabricated but not installed. Which interpretation best protects the earned value baseline for this status report?

• A. Count fabricated and accepted supports together; 45 supports are physically started, so EV should be USD 90,000.
• B. Do not use percent-spent or elapsed-time progress; objective EV is USD 72,000, while those methods would report USD 110,000 or USD 135,000.
• C. Use elapsed-time progress; 45 of 60 planned workdays have elapsed, so EV should be USD 135,000.
• D. Use percent-spent progress; recorded actual cost of USD 110,000 is the best current evidence of earned accomplishment.

Best answer: B

What this tests: Perform Budgeting Duties

Explanation: Earned value should reflect objective accomplishment under the approved measurement rule, not effort consumed. The accepted installed support count is 36 out of 90, so EV is \(36/90 \times 180{,}000 = \text{USD }72{,}000\). Using actual cost as progress would set EV equal to USD 110,000 and reward spending. Using elapsed time would report \(45/60 \times 180{,}000 = \text{USD }135{,}000\) and reward calendar passage. Both would make performance look better than the completed accepted work supports and could distort variance analysis and forecasts. Fabricated but uninstalled supports also do not meet the stated acceptance criterion.

The approved rule earns value only for accepted installed supports, so spending or elapsed time would overstate accomplishment.

Question 62

Topic: Revisions and Data Maintenance

At the June 30 status cutoff, a project has an approved customer change that adds a new deliverable. The change was authorized on June 28, but the added work is scheduled to start in July.

Current reported values before incorporating the change:

Constraints:

• The approved budget for the added scope is $250,000.
• No work or actual cost for the added scope occurred before June 30.
• The control account manager forecasts the added scope will cost $275,000.
• Prior-period performance history must not be restated.

What is the best professional action for the June report?

• A. Spread the $250,000 budget across prior months so the revised baseline reflects the full project from inception.
• B. Increase BAC and EV by $250,000 because the change has been formally approved.
• C. Increase BAC to $2,250,000, leave June PV, EV, and AC unchanged, and update EAC to $2,375,000.
• D. Increase BAC by $275,000 because the forecasted cost is higher than the approved budget.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: An approved scope change should be incorporated through disciplined baseline revision, using the authorized budget for the added work. Because the added work has not started and has no actual cost before the June 30 cutoff, current cumulative PV, EV, and AC for June should not be increased. Earned value is based on objective accomplishment, not approval of scope. The baseline BAC increases from $2,000,000 to $2,250,000. The forecast should also reflect the control account manager’s expected cost for performing the added scope, so EAC increases from $2,100,000 to $2,375,000. That produces a forecast overrun against the revised BAC, rather than hiding the impact by changing history or replacing budget with forecast cost.

The approved change increases the baseline budget for future authorized work, while the forecast must include the expected $275,000 cost without restating earned value history.

Question 63

Topic: Perform Budgeting Duties

A control account covers installation and acceptance testing of 100 identical field devices. The authorized budget at completion (BAC) is $200,000. The approved plan is to complete 20 devices in Month 1, 30 in Month 2, 25 in Month 3, and 25 in Month 4. Earned value is to be based on devices accepted by quality control. At the end of Month 2, 35 devices have been accepted and accrued actual cost (AC) is $90,000.

Use: PV = planned accepted devices / total devices × BAC; EV = accepted devices / total devices × BAC; EAC if current cost efficiency continues = BAC / CPI.

Which baseline structure and status interpretation best supports objective progress measurement, variance analysis, and forecast-at-completion reasoning?

• A. Budget the work as level of effort at $50,000 per month and earn $100,000 by elapsed time; SPI is 1.00 and EAC is about $180,000.
• B. Set earned value equal to accrued actual cost at each status date; EV is $90,000 and EAC remains $200,000 because costs are reconciled.
• C. Time-phase the BAC by planned accepted devices and earn value only for accepted devices; PV is $100,000, EV is $70,000, CPI is 0.78, and EAC is about $257,000.
• D. Hold the full $200,000 as an unphased control account budget until Month 4; variance analysis and EAC should wait until all devices are complete.

Best answer: C

What this tests: Perform Budgeting Duties

Explanation: A performance measurement baseline should be time-phased and tied to objective accomplishment criteria. Here, the approved plan calls for 50 devices by the end of Month 2, so PV is $100,000. Only 35 devices are accepted, so EV is $70,000. With AC of $90,000, CPI is $70,000 / $90,000 = 0.78. If that cost efficiency continues, EAC is approximately $200,000 / 0.78 = $257,000. This structure reveals both the physical progress shortfall and the unfavorable cost efficiency, while supporting a credible forecast-at-completion discussion.

The unit-based, time-phased baseline ties planned value and earned value to objective acceptance evidence and supports variance and EAC analysis.

Question 64

Topic: Analysis and Management Reports

A prime contractor is preparing the March subcontract performance input for a customer EVMS report. The subcontract is a fixed-price design package within one control account.

Which action best supports the March EVMS report?

• A. Report EV of $150,000, coordinate accounting treatment for the unsupported invoice, and require objective status plus a recovery forecast for the late IFC milestone.
• B. Report EV and AC of $400,000 because the subcontractor’s invoice and 80% complete statement show current progress.
• C. Move the IFC milestone budget into April and treat the $400,000 invoice as a commitment so the March report matches the subcontractor forecast.
• D. Report planned EV of $350,000 and defer variance reporting until the IFC drawings are either accepted or formally rejected.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Subcontract performance must be integrated using the authorized measurement method and objective evidence, not unsupported status claims or invoice amounts. The milestone method earns value only when the defined milestone is accepted. As of March 31, only the preliminary design milestone has been accepted, so EV is 30% of $500,000, or $150,000. The IFC milestone is late and not accepted, so it should not earn value. The invoice cannot be treated as earned progress, and the accounting note requires accepted milestone support or an approved accrual package before cost booking. The appropriate management action is to report the supported EV, reconcile or hold unsupported cost treatment through accounting, and obtain objective status and a recovery forecast for the late subcontract deliverable.

Only the accepted 30% milestone supports earned value, while the unsupported invoice and late deliverable require reconciliation and subcontract management action.

Question 65

Topic: Analysis and Management Reports

A control account status report dated 30 June shows BAC $2,000,000, PV $1,200,000, EV $1,000,000, and AC $1,300,000. The variance analysis attributes 70% of the $300,000 unfavorable cost variance to field rework caused by revised engineering drawings being released after fabrication started.

Management requires the mitigation plan to address the documented root cause, reduce residual cost exposure to no more than $75,000, and include measurable follow-up for the next monthly report. Residual cost exposure is calculated as residual probability × remaining potential cost impact.

Which mitigation plan should be reported as best meeting management’s requirement?

• A. Add an engineering-to-fabrication release gate requiring approved drawings before fabrication starts; residual exposure is 20% × $300,000 = $60,000; track weekly rework hours and on-time approved drawing releases.
• B. Hold $60,000 of management reserve for possible additional rework; residual exposure is reported as $60,000; review the account if the cost variance worsens next month.
• C. Authorize weekend installation overtime to recover lost field progress; residual exposure is 25% × $300,000 = $75,000; track total overtime hours used.
• D. Add a second inspection crew after fabrication; residual exposure is 15% × $450,000 = $67,500; track the number of inspections completed.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: A mitigation plan is credible only if it connects the variance cause to a control action, quantifies the remaining exposure, and defines how management will know whether the action is working. The unfavorable cost variance is driven mainly by rework caused by late engineering drawing releases. A release gate before fabrication directly addresses that cause. Its residual exposure is 20% × $300,000, or $60,000, which is below the $75,000 management limit. The proposed follow-up measures also link to the cause and effect: approved releases before fabrication and weekly rework hours. A plan that merely spends overtime, reserves funds, or adds downstream inspection may be useful for recovery or detection, but it does not adequately prevent recurrence of the documented root cause.

This plan targets the late drawing-release root cause, leaves residual exposure below the $75,000 limit, and defines measurable follow-up indicators.

Question 66

Topic: Perform Budgeting Duties

At the August 31 status date, a control account manager is preparing the earned value status for a material-heavy work package.

Which interpretation is best supported for the earned value status report?

• A. Earned value is $90,000 because the supplier invoice is recorded, and actual cost should exclude the accrual until cash is paid.
• B. Earned value is $150,000 because the purchase order is committed, and actual cost is $60,000 because that amount has been paid.
• C. Earned value is $60,000, and actual cost is $132,000; the commitment and cash payment should not be treated as earned progress.
• D. Earned value and actual cost are both $120,000 because the work package budget controls both values.

Best answer: C

What this tests: Perform Budgeting Duties

Explanation: Budgeted cost of work performed, or earned value, is the budget value assigned to objectively accomplished scope. Here, the approved budget is $120,000 and the earning rule grants 50% when the valves are received onsite, so earned value is $60,000. Actual cost is not the same as budget, commitment, invoice alone, or cash paid. For earned value reporting, actual cost should reflect the cost incurred for the work performed at the status cutoff. The received valves have $90,000 recorded by invoice and $42,000 recognized by accrual, so actual cost is $132,000. The $150,000 purchase order is a commitment that includes future support, and the $60,000 cash payment is a settlement activity, not a measure of earned progress.

The budgeted cost of work performed is based on the 50% earning rule, while actual cost includes the invoice plus accrual for received work.

Question 67

Topic: Organizing

During an internal EVMS readiness review, the project controls lead finds that the WBS coding in the scheduling tool does not match the control account structure in the responsibility assignment matrix. The contract requires monthly earned-value reporting by contract WBS level 3, and each control account must be traceable to a single WBS element and accountable manager. The baseline scope and budget are approved, but no scope change has been authorized. Actual costs for two deliverables are currently being collected under one shared charge code. What is the best corrective action?

• A. Keep the accounting charge code unchanged and allocate actual costs between deliverables using each CAM’s current percent complete assessment.
• B. Replace the WBS coding with OBS department codes because the CAM responsibility structure is already defined in the RAM.
• C. Report the two deliverables as one combined WBS element until a future contract change authorizes a new reporting structure.
• D. Correct the WBS-to-control-account coding in the RAM, work authorization, schedule, and accounting charge structure; split or map the shared charge code with an audit trail and reconcile actual costs before reporting.

Best answer: D

What this tests: Organizing

Explanation: When WBS coding does not align with control accounts or contract reporting needs, the corrective action should restore traceability without changing the approved baseline unless an authorized change exists. In an EVMS, each control account should connect the contract WBS scope, responsible organization or CAM, authorized work, schedule activities, budget, earned value, and actual costs. A shared charge code across two WBS deliverables creates actual-cost ambiguity and weakens variance analysis. The best action is to correct the coding relationships across the RAM, work authorization, schedule, and accounting interface, then reconcile any affected actual costs with an audit trail. This supports contract reporting and preserves baseline integrity.

This preserves the approved scope and budget while restoring traceability among WBS scope, control accounts, responsibility, and actual costs.

Question 68

Topic: Perform Planning and Scheduling Duties

A control account manager is finalizing the earned value measurement method for a discrete work package in the baseline. The work package produces testable hardware units, and the customer has asked how progress will be supported at each status date.

Which measurement approach best supports earned value based on work accomplished?

• A. Earn 70% of the work package budget because 70% of the planned labor hours have been charged.
• B. Earn value for 5 of 8 modules because assembly activity has started and the remaining test work is a normal follow-on step.
• C. Earn value only for modules with signed test reports and quality releases, using a unit or weighted-milestone method tied to those events.
• D. Use level of effort because the work package requires continuous engineering and inspection support through the status date.

Best answer: C

What this tests: Perform Planning and Scheduling Duties

Explanation: For discrete earned value work, progress should be measured against objective accomplishment criteria established in the plan. The exhibit shows that technical completion is not merely assembly or labor consumption; each module must pass an approved functional test and have a signed quality release. Therefore, earned value should be credited only when those measurable events occur, either as completed units or as weighted milestones if the baseline defines interim objective steps. Labor hours charged may explain cost performance, but they do not prove technical accomplishment. Similarly, assembled-but-untested modules may represent work in process, not earned completion, unless the measurement plan assigns objective interim credit to assembly with defined evidence.

Signed test reports and quality releases provide objective technical evidence that discrete work has been accomplished.

Question 69

Topic: Organizing

At the May status cutoff, a control account manager reports 15% earned value on an installation interface work package. The interface activity is still in a draft change proposal, the customer has not approved it, the performance measurement baseline contains no budget or schedule for it, and no signed work authorization has been issued. Labor charges have already begun against a general support code. Which action best prevents performance measurement on unauthorized or prematurely started work?

• A. Move the labor charges to the closest existing control account and measure earned value there until the customer approves the change.
• B. Create a temporary work package with a provisional budget so progress can be reported while the change proposal is under review.
• C. Allow the reported earned value because labor has started, then add the budget to the baseline during the next routine status update.
• D. Withhold earned value and require an approved change plus signed work authorization tied to the WBS, control account, budget, schedule, and charge code before measuring performance.

Best answer: D

What this tests: Organizing

Explanation: Work authorization is the control that links approved scope to responsible ownership, budget, schedule, and cost collection before work is released for earned-value measurement. In this case, the activity is not yet authorized scope: the change is only in draft, the PMB has no budget or schedule for it, and no signed authorization exists. Labor that has already occurred should remain traceable for accounting and change evaluation, but it should not create earned value or baseline budget. Opening earned-value credit before authorization would blur scope control, misstate progress, and potentially hide out-of-scope work inside approved performance data.

This protects baseline integrity by allowing performance measurement only after scope, responsibility, budget, schedule, and cost collection are formally authorized.

Question 70

Topic: Organizing

A project is establishing its responsibility assignment matrix before releasing work authorization for a major equipment installation. The WBS is deliverable-oriented, the accounting system can collect actual costs only when a unique charge number is assigned, and monthly earned-value reports must support corrective action by the responsible manager. Two functional departments will perform work within the same deliverable. Which organizational assignment best supports control-account ownership, actual-cost collection, and management action?

• A. Assign ownership to the project sponsor and have functional leads submit informal monthly progress narratives.
• B. Create each control account at the WBS and OBS intersection, assign one accountable control account manager, and map unique charge numbers to that manager’s authorized work scope.
• C. Assign joint control-account ownership to both functional department managers so each can report progress for its own staff.
• D. Keep the control account at the deliverable WBS level and collect actual costs in a shared project overhead charge number.

Best answer: B

What this tests: Organizing

Explanation: In an earned value management structure, a control account should be positioned where authorized scope and organizational responsibility intersect. Assigning one accountable control account manager supports clear performance responsibility, timely corrective action, and traceable variance analysis. Because the accounting system requires unique charge numbers to collect actual costs, those charge numbers must align with the authorized control-account scope rather than a shared or informal collection point. Functional departments may support the work, but shared ownership weakens accountability and can obscure who must explain variances or implement recovery actions.

This establishes clear single-point ownership while preserving traceability from authorized scope to actual costs and management action.

Question 71

Topic: Analysis and Management Reports

A control account has cumulative PV of $4.8 million, EV of $4.0 million, and AC of $5.0 million at the status date, giving a CPI of 0.80. The remaining budget is $6.0 million: $4.0 million for a material package now covered by firm supplier quotes and $2.0 million for installation labor using the same crew and methods as the completed work. The variance analysis shows the poor CPI was partly caused by a start-up rework issue that has been closed. The approved baseline has not changed, and accounting data have been reconciled. What is the best way to prepare the EAC for management reporting?

• A. Develop the ETC by remaining-work type, using supplier quote evidence for the material package and a supported productivity assumption for installation labor.
• B. Revise the performance measurement baseline to remove the closed rework issue before calculating the forecast.
• C. Use the original BAC as the EAC because the baseline is approved and the start-up issue is closed.
• D. Apply the cumulative CPI of 0.80 to the entire remaining budget because it is the latest objective performance index.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Current CPI is important evidence, but it should not be applied mechanically to all remaining work when the remaining scope has different cost drivers or when conditions have changed. Here, the remaining work includes a material package supported by firm supplier quotes and installation labor that may still be affected by the demonstrated productivity trend. A credible EAC should segment the ETC, use the best available evidence for each segment, and document assumptions. The approved baseline remains the basis for measuring performance; the forecast is updated to reflect expected final cost, not to rewrite history or hide variances.

The forecast should reflect changed conditions and apply performance trends only where they are representative of the remaining work.

Question 72

Topic: Account Considerations

As of the August 31 status date, Control Account 2.4 is being reconciled for the monthly earned value report. Use cumulative values through August 31 unless noted.

Additional reconciliation facts:

• 700 labor hours at $100/hour were performed by August 31 but did not post because a timesheet interface failed.
• A $40,000 purchase order is committed for material due in September; no goods were received by August 31.
• An approved customer change adds $50,000 of budget effective September 15.
• A $200,000 customer progress payment was received August 25.

For this report, actual cost includes incurred costs through the status date, including accruals for work performed, and excludes unreceived commitments and customer cash receipts. Cost variance is calculated as \(CV = EV - AC\).

What is the best management reporting conclusion for August 31?

• A. Add the $50,000 approved change to the August baseline and leave AC at $210,000 because the variance is a baseline-change issue.
• B. Offset AC by the $200,000 customer payment and report net AC of $10,000 because cash receipt reduces project cost exposure.
• C. Apply $40,000 of reserve to the control account because the purchase order commitment explains the apparent unfavorable cost position.
• D. Accrue $70,000 to the control account, report adjusted AC of $280,000 and CV of -$30,000, and treat it as a status cutoff reconciliation problem.

Best answer: D

What this tests: Account Considerations

Explanation: At a status cutoff, actual cost should reflect costs incurred for authorized work performed through the status date. The missing labor was performed by August 31, so it should be accrued to the control account: $210,000 posted AC + $70,000 labor accrual = $280,000 reconciled AC. With EV of $250,000, the cost variance is -$30,000. The control issue is not a baseline change, reserve use, or payment matter; it is a cutoff and accounting reconciliation problem that affects the accuracy of the control-account status. The September-effective change may affect a later baseline, the unreceived purchase order is only a commitment, and the customer payment is cash flow rather than actual cost.

The unposted labor was incurred before the status date, so AC should be $210,000 + $70,000 = $280,000 and CV should be $250,000 - $280,000 = -$30,000.

Question 73

Topic: Revisions and Data Maintenance

At the May status cutoff, the project controls analyst finds that April actual costs were posted to the wrong control account. The April customer performance report has already been issued, and the accounting system corrected the posting in May. The contract reporting procedure requires traceability of prior submitted values and explanations for any prior-period adjustments. The control account manager asks the analyst to overwrite the April report file so the historical trend chart “looks clean.” What is the best professional action?

• A. Leave the error uncorrected in all EVMS reports because prior customer reports cannot be changed after submission.
• B. Move the same amount through management reserve so the control account trend is not affected.
• C. Preserve the issued April record, document the correction with an audit trail, and show the reconciliation impact in the May report.
• D. Overwrite the April report file because the corrected accounting record is now the best available data.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: When a prior-period error is discovered after a report has been issued, disciplined data maintenance should preserve the original submitted record and maintain a clear audit trail. The accounting correction still needs to be reflected, but it should be documented as a prior-period adjustment or reconciliation item according to the reporting procedure. Overwriting historical records without explanation destroys traceability and can make variance trends, customer reports, and EVMS surveillance evidence unreliable. The appropriate action is transparent correction, not silent replacement. This protects data integrity while allowing management to understand the effect of the corrected actual cost posting.

This preserves prior-period traceability while transparently reconciling the accounting correction in the current reporting cycle.

Question 74

Topic: Revisions and Data Maintenance

At the April month-end close, the project controls analyst finds a reconciliation difference after the March customer report has already been issued.

• March report issued: April 5
• March reported values for Control Account 2.1: PV $500,000, EV $450,000, AC $470,000
• April 20 reconciliation finding: a $30,000 March labor accrual for Control Account 2.1 was posted to the wrong control account
• Source evidence: approved timesheets and accounting correction voucher
• Baseline status: no approved scope or budget change
• Reporting procedure: issued prior-period changes must be traceable and disclosed in the next report

What is the best data maintenance action?

• A. Post a documented accounting correction with source references, preserve the issued March record, and disclose the cumulative impact in the next report.
• B. Revise the March baseline budget for Control Account 2.1 so the cost variance remains consistent with the corrected accounting record.
• C. Overwrite the March AC value in the reporting database so the historical report now shows the corrected amount without a variance note.
• D. Leave the accounting error uncorrected because the March customer report has already been issued.

Best answer: A

What this tests: Revisions and Data Maintenance

Explanation: When a prior-period accounting error is discovered after an issued earned-value report, data maintenance should correct the record without erasing history. The supporting evidence identifies a real March labor accrual and an accounting correction voucher, so the actual cost data should be corrected. However, because the March report was already issued and the procedure requires traceability and disclosure, the correction should preserve the original reported values, retain source references, and explain the cumulative impact in the next report. There is no approved baseline change, so changing the budget would compromise baseline integrity. The professional control concern is not merely getting the database number to match; it is maintaining a clear audit trail from source accounting evidence through reported earned-value impacts.

This preserves the audit trail while correcting traceable actual-cost data and explaining the impact of the prior-period correction.

Question 75

Topic: Analysis and Management Reports

At the 30 June status review, a control account has BAC of $1,200,000, EV of $800,000, and AC of $920,000. The remaining authorized critical-path work is 4,000 EV-hours, and the contractual milestone is due in 6 weeks. Use:

• Duration = remaining EV-hours / production rate, plus any mobilization lead time
• EAC = AC + ETC
• Incremental recovery cost = option ETC - current-plan ETC

The current plan finishes in 8 weeks with an ETC of $420,000. The customer needs a recovery decision by 5 July. The program manager can approve up to $75,000 of incremental recovery cost before that date; anything higher requires a change board on 20 July, which is too late for the customer decision. No scope reduction has been approved.

Which recommendation best balances recovery feasibility, remaining work, cost exposure, and stakeholder decision timing?

• A. Continue the current plan because it has the lowest valid EAC and avoids additional recovery spending.
• B. Use existing-team overtime because it finishes in about 5.9 weeks and stays within the immediate incremental approval limit.
• C. Select the subcontractor because it gives the fastest finish once mobilized and transfers execution risk.
• D. Defer verification work because it lowers EAC and reduces the remaining EV-hours to fit the milestone.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: The best management recommendation must consider both numeric feasibility and governance timing. Continuing the current plan has an EAC of $1,340,000, but it finishes in 8 weeks, which misses the 6-week milestone. Existing-team overtime finishes in 4,000 / 675 = about 5.9 weeks, with EAC of $1,392,000 and an incremental recovery cost of $52,000 over the current plan, which is within the $75,000 immediate approval limit. The subcontract alternative also appears schedule-feasible at about 5.8 weeks including mobilization, but its incremental cost is $145,000, requiring a later change board that misses the customer decision window. Deferring verification work is not a valid recovery basis because no scope reduction has been approved. The professional recommendation is therefore the feasible recovery action that preserves authorized scope and supports timely stakeholder action with controlled cost exposure.

Overtime meets the 6-week need, adds only $52,000 versus the current plan, and can be approved before the customer decision date.

Questions 76-100

Question 76

Topic: Perform Planning and Scheduling Duties

At the May status update, the scheduler is validating the CPM forecast used for earned-value planning. The project calendar uses workday numbers, all listed relationships are finish-to-start with zero lag, and no baseline change has been approved.

What schedule implication is supported by the exhibit?

• A. The baseline should be revised to workday 74 so the earned-value schedule baseline matches the current forecast.
• B. The current forecast completion is workday 74, indicating a 4-workday delay unless recovery is achieved or a change is approved.
• C. The baseline completion date remains achievable because the path has zero total float after the update.
• D. The schedule has 4 workdays of available float because 70 minus 40 leaves 30 workdays to complete the remaining path.

Best answer: B

What this tests: Perform Planning and Scheduling Duties

Explanation: For CPM schedule interpretation, compare the remaining duration on the driving path with the workdays available to the baseline completion milestone. The path has 8 + 12 + 14 = 34 workdays remaining. From the end of workday 40 to the end of workday 70, only 30 workdays are available. Therefore, the current forecast completion is workday 74, creating a 4-workday negative schedule implication against the baseline milestone. In an earned-value environment, this should be reported as a forecast schedule delay and used to support recovery planning or change-control evaluation. The performance measurement baseline should not be revised merely to match a forecast unless an approved baseline change exists.

The remaining critical-path duration is 34 workdays from workday 40, which forecasts completion at workday 74 versus the baseline milestone at workday 70.

Question 77

Topic: Analysis and Management Reports

A project controls analyst discovers a status-data error while preparing the March earned-value report. The control account uses monthly current-period and inception-to-date cumulative performance measures.

Which status-data correction best preserves comparability between current-period and cumulative performance measures?

• A. Add the $120,000 to March current-period EV because the omission was discovered during the March reporting cycle.
• B. Reduce March AC by $120,000 to offset the prior EV omission without changing cumulative EV.
• C. Record the $120,000 as a prior-period EV correction, update cumulative EV, and identify the adjustment separately from March current-period EV.
• D. Move $120,000 of February PV into March so the corrected EV and PV remain in the same reporting month.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: Current-period measures should represent performance that occurred in the current reporting period, while cumulative measures should reflect all valid performance through the status date. The exhibit shows that the milestone was completed and accepted in February, and that the related actual costs were already captured in February. Treating the omitted EV as March progress would overstate March current-period performance and distort trend comparisons. The disciplined correction is to process a prior-period status correction with an audit trail, update inception-to-date EV, and show the adjustment separately so management can compare March performance to March PV and AC without mixing in a February accomplishment.

This preserves March current-period performance while making cumulative EV accurate and traceable to the February accomplishment evidence.

Question 78

Topic: Perform Planning and Scheduling Duties

At the 31 May status date, a critical-path installation control account has these schedule facts:

• Total baseline quantity: 10,000 ft of tray installation
• Budget rate for earned value: $50 per installed ft
• Planned quantity complete by 31 May: 8,000 ft
• Accepted installed quantity by 31 May: 6,000 ft
• Required baseline finish: 14 June, two workweeks after the status date
• Current sustainable production rate: 1,500 ft per workweek
• No approved baseline change has been issued
• A separate weather risk has a 30% probability of reducing late-June productivity, but it has not occurred

Use: remaining duration = remaining quantity / current production rate.

Which interpretation should the controls analyst give the control account manager?

• A. Classify it as no current issue; 6,000 ft is more than half complete and the remaining 4,000 ft can be finished within the two-week window.
• B. Classify it as an active schedule-performance issue; 4,000 ft remain and the forecast duration is 2.67 weeks, so recovery and a forecast update are needed.
• C. Classify it as a future weather risk; the only stated uncertainty is the 30% storm probability, so keep the current schedule forecast unchanged.
• D. Classify it as a baseline-maintenance change; move the 14 June baseline finish to the 2.67-week forecast date to remove the schedule variance.

Best answer: B

What this tests: Perform Planning and Scheduling Duties

Explanation: A risk is an uncertain future event; an issue is a condition that has already occurred and now requires management action. Here, the physical progress shortfall is already present: planned quantity was 8,000 ft, but only 6,000 ft was accepted, producing earned value of $300,000 versus planned value of $400,000. More importantly for scheduling, 4,000 ft remain and the current rate of 1,500 ft per workweek gives 2.67 workweeks of remaining duration. Only two workweeks remain to the 14 June baseline finish. That makes the schedule impact current and forecastable, not merely a future uncertainty. The weather item may remain a risk, but it is not the primary classification for the existing production shortfall.

The work is already behind the plan and the current production rate forecasts completion about 0.67 workweek after the required baseline finish.

Question 79

Topic: Analysis and Management Reports

A contractor is preparing the monthly earned value customer report for a control account on a flight-test support contract. The customer program manager has asked that the report identify the management decision needed, not just restate variances.

Which stakeholder decision should the report be written to support?

• A. Defer management action until supplier invoices are paid and actual costs are final for the month.
• B. Approve adding the pending supplier claim to the performance measurement baseline to remove the unfavorable variance.
• C. Decide whether to accept the forecast milestone delay or authorize the recovery alternative with its cost impact.
• D. Treat the condition as a cost-accounting timing issue because actual cost is only 0.3M higher than earned value.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: The report should support the decision implied by the earned value evidence. Schedule variance is unfavorable because EV is 4.1M versus PV of 5.0M, a 0.9M shortfall. The forecast also shows a VAC of -1.8M against a 10.0M BAC, which breaches the stated reporting trigger. The exhibit identifies the driver, the absence of an approved baseline change, and a specific recovery alternative that trades added ETC for schedule recovery. Therefore, the customer-facing report should frame the decision around whether to accept the late milestone or authorize the recovery path with its cost consequence. It should not use a pending claim to revise the baseline, wait for cash activity, or dismiss the condition as only accounting timing.

The variance and forecast evidence show a threshold breach and a clear cost-schedule tradeoff requiring stakeholder direction.

Question 80

Topic: Perform Planning and Scheduling Duties

A control account manager is preparing month-end status for a hardware qualification deliverable. The performance measurement baseline and schedule were approved before work started.

Which correction is best supported by the exhibit?

• A. Remove the earned value claimed for the milestone, keep the actual cost recorded, and status the remaining nonconformance and acceptance work.
• B. Keep the earned value because all test steps were run and treat the customer signature as administrative follow-up.
• C. Move the actual cost to a later period so cost and earned value are recognized together after customer signature.
• D. Revise the milestone criterion to internal test execution and keep the earned value to reflect technical progress.

Best answer: A

What this tests: Perform Planning and Scheduling Duties

Explanation: Earned value recognition must follow the approved objective accomplishment criteria in the baseline. Here, the baseline milestone earns 100% only when the customer-accepted test report and signed acceptance form are complete. Running all test steps is useful technical progress, but it does not satisfy the acceptance criterion, especially with open nonconformances. The proper correction is to reverse the unsupported earned value, leave actual costs traceable to the period in which they were incurred, and update schedule/status information for the remaining work needed to meet acceptance. Changing the criterion after the fact or moving actual costs would damage baseline integrity and accounting traceability.

The approved accomplishment criterion requires customer acceptance, so earned value should not be recognized until that objective evidence exists.

Question 81

Topic: Analysis and Management Reports

At the May status date, a control account manager submits the following forecast note for a mechanical installation control account. The contract requires EAC updates when current performance indicates a material forecast change.

Which interpretation is best supported?

• A. Update the EAC to $2,350,000 and report the forecast overrun without changing the performance measurement baseline.
• B. Leave the EAC at $2,000,000 because future productivity should recover to the original budget rate.
• C. Increase the BAC to $2,350,000 so the forecast overrun is incorporated into the approved baseline.
• D. Draw $350,000 from management reserve because the revised EAC exceeds the original BAC.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: An EAC is a forecast of the expected final cost; it should be updated when current performance or a credible estimate of remaining work indicates the prior forecast is no longer realistic. Here, actual costs reconcile correctly, there is no approved scope or baseline change, and no management reserve authorization has been issued. The CAM’s estimate of $1,100,000 to complete the remaining work supports an EAC of AC plus ETC, or $1,250,000 + $1,100,000 = $2,350,000. That forecast should be reported as a likely overrun against the existing BAC, not used to alter the baseline or mask the variance.

The exhibit supports an EAC forecast update because the remaining-work estimate has changed, while no approved baseline change, reserve authorization, or accounting correction exists.

Question 82

Topic: Analysis and Management Reports

A control account manager submits the following monthly progress report for a work package as of the September 30 status date:

• BAC: $600,000 for 500 accepted installed units
• Earned value rule: EV = BAC × accepted installed units / total units
• Planned by September 30: 300 accepted installed units, so PV = $360,000
• Physically accepted by September 30: 250 installed units
• Costs paid and posted by September 30: $310,000
• Additional incurred September labor and material not yet posted: $80,000 accrual
• Submitted report values: PV = $360,000, EV = $360,000, AC = $310,000

Which evaluation best supports reliable downstream variance analysis and forecast update?

• A. Correct EV to $300,000 and AC to $390,000 before variance analysis, because the submitted report overstates progress and understates incurred cost.
• B. Use the submitted values because PV equals EV and paid costs are below earned value, indicating no schedule issue and favorable cost performance.
• C. Change PV to $300,000 so that PV matches the accepted physical progress, then update only the cost forecast using the posted actual costs.
• D. Keep EV at $360,000 but add the $80,000 accrual only to the forecast, because accruals affect EAC but not current-period variance reporting.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Reliable variance analysis depends on consistent status-date data for planned value, earned value, and actual cost. PV remains $360,000 because 300 of 500 units were planned by the status date. EV must reflect objective accomplishment: $600,000 × 250 / 500 = $300,000. AC should include costs incurred for the same cutoff period, not only cash paid or costs already posted, so AC is $310,000 + $80,000 = $390,000. The submitted report would incorrectly show zero schedule variance and favorable cost performance. Corrected data show SV = $300,000 - $360,000 = -$60,000 and CV = $300,000 - $390,000 = -$90,000, which are essential inputs for credible variance analysis and forecast updates.

EV must be based on accepted units and AC must include incurred accruals through the status date, producing unfavorable variance data for reliable analysis.

Question 83

Topic: Perform Planning and Scheduling Duties

During an integrated baseline review for Control Account 3.2, the review team compares the authorized scope, CPM schedule, and time-phased budget.

What is the most appropriate professional response?

• A. Record an IBR finding and require the control account plan to reconcile authorized scope, schedule milestones, budget phasing, and supportable assumptions before baseline acceptance.
• B. Use management reserve to cover the September modules immediately because the missing budget represents normal execution risk.
• C. Accept the baseline because the CPM schedule includes all 12 acceptance milestones, and budget phasing can be corrected through future variance analysis.
• D. Approve the plan if the CAM updates the EAC to include the four September modules without changing the time-phased PMB.

Best answer: A

What this tests: Perform Planning and Scheduling Duties

Explanation: An integrated baseline review tests whether the performance measurement baseline is executable, internally consistent, and traceable to authorized scope. Here, the authorized scope and schedule include 12 modules, but the time-phased budget covers only eight. The September work is not supported by approved scope deletion, budget transfer, or change control, and the CAM’s productivity assumption is not objective planning evidence. The proper response is to document the deficiency and require correction before accepting the affected baseline. A credible control account plan must align scope, schedule, budget, responsibility, and earned value measurement assumptions so that future performance data will be meaningful.

The evidence shows missing budget for authorized scope and an unsupported planning assumption, so the control account is not ready for baseline acceptance.

Question 84

Topic: Analysis and Management Reports

A control account manager is preparing the June 30 management report for a control account with a budget at completion (BAC) of $2,000,000. The current period appears favorable, but the team has updated the remaining-work forecast based on a vendor productivity problem that has already affected future work packages.

Use these formulas: current-period cost variance = EV − AC; EAC = cumulative AC + approved ETC; VAC = BAC − EAC.

Which management conclusion best supports the required performance decision?

• A. Use only the current-period actual cost because forecasted remaining work is not part of earned value management reporting.
• B. Report the control account as favorable because the current-period cost variance is $5,000 favorable.
• C. Revise the BAC to $2,200,000 so the forecast no longer shows an unfavorable variance at completion.
• D. Focus management attention on the forecast: EAC is $2,200,000 and VAC is $200,000 unfavorable, despite the current-period favorable variance.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Managerial analysis should not stop at the current-period variance when the forecast indicates a material impact at completion. Here, the current-period cost variance is $315,000 − $310,000 = $5,000 favorable. However, the approved estimate to complete changes the completion outlook: EAC = $1,250,000 + $950,000 = $2,200,000. Therefore, VAC = $2,000,000 − $2,200,000 = $200,000 unfavorable. A small favorable current-period result does not offset a credible forecast showing the control account will exceed its budget. The management report should direct attention to the forecast impact, cause, corrective action, and decision need rather than emphasizing only the favorable monthly variance.

The current period is slightly favorable, but the approved ETC drives an EAC above BAC, making the forecast overrun the management issue.

Question 85

Topic: Analysis and Management Reports

A project controls manager is reviewing a customer monthly report before submittal. The contract requires any cumulative CV or SV worse than -10% to include cause, impact, corrective action, forecast effect, and any customer decision needed. Based on the exhibit, which professional judgment is best supported?

• Variance note: Late customer interface data delayed the integration work package by 3 weeks; a second test crew is planned from July 10.

• Accounting note: June accruals are posted and reconciled; no material timing difference remains.

• Change note: CR-17 for an added environmental test is pending customer disposition and is not in the PMB.

• Draft report excerpt: “Integration is on track with minor timing slippage. Cost growth is mainly accounting timing. Recovery is expected; no customer decision is needed.”

• A. Submit the report as written because it is concise and avoids unnecessary technical detail for the customer.

• B. Revise the report to disclose the threshold variances, cause, impact, recovery plan, EAC/VAC effect, and the pending CR-17 decision.

• C. Defer all customer reporting until CR-17 is approved and can be added to the PMB.

• D. Revise the PMB immediately to match the EAC so the customer report reflects the current forecast.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: A customer management report should be factual, complete enough to support decisions, and traceable to EVMS data. Here, SV is negative because EV is less than PV, and CV is negative because EV is less than AC. Both exceed the stated -10% reporting threshold. The draft also incorrectly attributes cost growth to accounting timing even though accruals are reconciled. It omits the 3-week schedule impact, the recovery action, the EAC overrun versus BAC, and the pending customer disposition of CR-17. A professional report should not hide unfavorable performance or replace baseline control with optimistic wording; it should connect the variance, cause, impact, forecast, and requested decision clearly.

The exhibit shows material cost and schedule variances, a reconciled actual-cost basis, a forecast overrun, and a pending customer decision that the draft report does not address.

Question 86

Topic: Account Considerations

A control account covers installation of 100 isolation valves with a total budget of $200,000. The status date is September 30. The performance measurement baseline planned 60 owner-accepted valves by that date. Earned value is credited only for owner-accepted valves using:

\(EV = \text{accepted valves} \times \$2,000\)

Accounting policy for actual cost at the status date includes incurred direct costs for work performed through September 30, including needed accruals, and excludes future commitments and work after the status date.

Status data:

• 50 valves were owner-accepted by September 30.
• 5 additional valves were installed on October 1 and were not accepted by September 30.
• The ledger shows $112,000 of direct costs posted through September 30.
• A $18,000 vendor invoice for September materials already received and used on accepted valves has not yet been accrued.
• A $40,000 purchase commitment exists for October material delivery.

Which status-date conclusion is best supported?

• A. PV is $120,000, EV is $100,000, and AC should be $170,000; all posted costs, accruals, and open purchase commitments should be included.
• B. PV is $120,000, EV is $110,000, and AC should be $112,000; the October 1 installations can be counted because they are physically installed.
• C. PV is $100,000, EV is $100,000, and AC should be $112,000; the baseline should be reset to match accepted progress at the status date.
• D. PV is $120,000, EV is $100,000, and AC should be $130,000; the ledger-only AC is not aligned with the status cutoff until the missing accrual is recorded.

Best answer: D

What this tests: Account Considerations

Explanation: At the status date, the three core values must be derived from consistent sources but they are not the same type of measure. Planned value comes from the approved time-phased baseline: 60 planned valves × $2,000 = $120,000. Earned value comes from objective accomplishment: 50 owner-accepted valves × $2,000 = $100,000. Actual cost should reflect costs incurred for work performed through the cutoff date, not merely cash paid or ledger postings. The $18,000 September material cost was incurred and should be accrued, so AC should be $112,000 + $18,000 = $130,000. The October installations and October purchase commitment are outside the September 30 cutoff and should not be used to increase EV or AC for this status date.

PV follows the time-phased baseline, EV follows accepted physical progress, and AC must include incurred September cost even if it has not yet posted.

Question 87

Topic: Revisions and Data Maintenance

A control account manager is reconciling the monthly earned-value report before customer submittal. The accounting system and commitment log use the same status date, and no baseline change is pending.

Which interpretation or action is best supported by the reconciliation?

• A. Leave AC at $430,000 because the earned-value report already includes more than the posted accounting costs.
• B. Update AC to $460,000, exclude the future commitment, and report a cost variance of -$10,000.
• C. Update AC to $580,000 by adding the commitment, and revise the baseline budget to remove the variance.
• D. Reduce EV to $390,000 so earned value reconciles directly to posted accounting costs.

Best answer: B

What this tests: Revisions and Data Maintenance

Explanation: For reconciliation, actual cost should reflect costs incurred for work received as of the status date. Posted direct costs of $390,000 plus the approved accrual of $70,000 give reconciled AC of $460,000. The $120,000 purchase commitment is not actual cost because the related future delivery has not occurred. With EV of $450,000, the corrected cost variance is \(EV - AC = \$450,000 - \$460,000 = -\$10,000\). This is a data maintenance correction to actual-cost reporting, not a reason to change the performance measurement baseline or alter earned value without objective progress evidence.

Actual cost should include posted costs plus the approved accrual, but not the open commitment for future delivery.

Question 88

Topic: Organizing

During an integrated baseline review, the EVMS lead examines the proposed Level 2 structure that will be used to assign control accounts and measure earned value.

Which interpretation is best supported by the exhibit?

• A. The structure should be treated as the project schedule because it identifies the main groups that perform the work.
• B. The structure is acceptable as a WBS because it follows the reporting hierarchy used for monthly management reviews.
• C. The structure is not a deliverable-oriented WBS and should be revised around the project products or deliverables before control accounts are finalized.
• D. The structure is acceptable as a WBS because each element has a responsible manager and can collect actual costs.

Best answer: C

What this tests: Organizing

Explanation: A deliverable-oriented WBS decomposes the authorized project scope into the products, services, or results to be delivered. It is the scope backbone for earned-value control and supports assignment of control accounts through the RAM. The exhibit does not show deliverables; it shows functional departments, cost collection groupings, reporting lines, and a recurring reporting activity. Those may be useful for the OBS, accounting structure, schedule, or management reporting, but they do not replace a WBS. If control accounts are built on this structure, earned value may be tied to who performs work or how costs are collected rather than what scope has been objectively accomplished.

The listed elements are organizations, cost-code groupings, reporting lines, and activities rather than decomposed deliverable scope.

Question 89

Topic: Perform Budgeting Duties

An EVP practitioner is reviewing candidate control-account structures before the performance measurement baseline is frozen. The contract requires objective earned value, schedule traceability, and actual-cost reconciliation at the control-account level. Which structure should be selected?

• A. Functional-department accounts, because actual costs are collected by responsible manager
• B. Deliverable/CAM accounts, because each WBS deliverable is assigned to one responsible OBS manager and linked to work packages
• C. Cost-element accounts, because labor, material, and subcontract budgets can be separately controlled
• D. Summary-WBS account, because it minimizes the number of control accounts in the baseline

Best answer: B

What this tests: Perform Budgeting Duties

Explanation: A control account should be established at the management control point where the WBS scope and responsible OBS manager intersect. That structure allows work packages and planning packages to be assigned within a defined scope, time-phased budget, schedule activities, earned value method, and actual-cost collection path. The deliverable/CAM structure is therefore the best fit because it supports integrated performance measurement and accountability. A structure based only on functional departments, cost elements, or a high-level WBS rollup may produce useful summaries, but it weakens traceability between authorized scope, scheduled accomplishment, budget, earned value, and actual costs. Control accounts should be detailed enough to preserve accountability and performance visibility without becoming mere accounting categories or reporting summaries.

This structure creates a control point where scope, responsibility, schedule activities, budgets, earned value methods, and actual-cost charge codes can be integrated.

Question 90

Topic: Perform Planning and Scheduling Duties

A control account manager is reviewing the technical performance measure to be used as earned-value completion evidence for a cable-installation work package.

• Work package: WP-3.2.4 Cable Runs
• Included scope: Pull, terminate, and label 48 shielded signal cable runs between the control room and four pump stations.
• Completion evidence: Signed continuity and insulation-resistance test record for each cable run.
• Excluded scope: Network switch configuration, control software checkout, and pump commissioning.
• Planned finish criterion: 48 accepted cable runs by the status milestone.

Which proposed measure is specific, measurable, and aligned with the work package definition?

• A. Report whether each pump station transmits operating data successfully during commissioning.
• B. Track the percentage of the work package budget spent by the installation crew each week.
• C. Count accepted cable runs, with credit only for each run that is pulled, terminated, labeled, and supported by a signed test record.
• D. Use the field supervisor’s weekly assessment of whether cabling is mostly complete.

Best answer: C

What this tests: Perform Planning and Scheduling Duties

Explanation: A technical performance measure used for earned-value planning should describe the physical or technical accomplishment expected from the work package, define how it will be measured, and rely on objective completion evidence. Here, the work package is limited to installing, terminating, labeling, and testing 48 cable runs. The signed test record is the stated evidence of acceptance, so counting accepted cable runs directly supports measurable earned progress. Measures based on money spent, later commissioning results, or subjective judgment do not provide reliable technical completion evidence for this defined work package.

This measure matches the defined scope, uses objective evidence, and quantifies completion against the 48 accepted cable runs.

Question 91

Topic: Account Considerations

A project cost analyst is reviewing charges proposed for Control Account CA-230, Pump Skid Fabrication, at the April status cutoff. The project procedure states that direct costs must be specifically identifiable with authorized scope in a work package or control account.

Which cost-treatment conclusion is best supported by the exhibit?

• A. Charge all four items directly to CA-230 because they support fabrication work.
• B. Charge the seismic bracket redesign directly to CA-230 because the field request has already caused work to start.
• C. Charge the welder labor directly to CA-230 and exclude the other items from CA-230 direct cost capture.
• D. Charge the supervisor allocation directly to CA-230 because management effort is necessary for the shop work.

Best answer: C

What this tests: Account Considerations

Explanation: Direct cost capture in an EVMS depends on traceability to authorized work scope, not merely on whether an activity seems related to the project. The welder labor has a timecard reference to a specific authorized work package and a specific pump skid deliverable, so it belongs as a direct charge to the control account. The supervisor allocation is a department-wide allocation, so it is not specifically identifiable to the control account as a direct cost. The seismic bracket effort is tied to a pending change, so charging it to the baseline control account before authorization would weaken baseline and actual-cost discipline. The calibration service supports multiple projects and departments, so it should be treated according to the organization’s indirect or shared-cost procedure rather than directly charged to this control account.

The welder labor is specifically traceable to authorized work package scope, while the other items are indirect, shared, or not yet authorized.

Question 92

Topic: Organizing

A project team is preparing the EVMS control structure for baseline approval. The project controls lead has these constraints:

• Each control account must have one named control account manager accountable for budget, earned value, actual-cost review, and variance response.
• Actual costs will be collected by the control account code shown in the RAM.
• Variance narratives are required when cumulative cost or schedule variance exceeds 10%.

RAM excerpt:

• WBS 1.2, Test System: assigned jointly to the Systems Engineering manager and Test manager; one control account code; no budget split.
• WBS 1.3, Training: assigned to the Training lead; detailed work packages for the next 90 days and planning packages beyond that.
• WBS 1.4, Deployment: assigned to the Field Operations manager; installation crews named later in work authorizations.
• WBS 1.5, Project Management: assigned to the PMO manager; measured as level of effort.

Which RAM weakness should be corrected before approving the baseline?

• A. WBS 1.2 has joint control-account accountability without a single responsible manager or budget split.
• B. WBS 1.3 includes planning packages beyond the near-term detailed planning window.
• C. WBS 1.4 does not name individual installation crew members in the RAM.
• D. WBS 1.5 uses level-of-effort measurement for project management work.

Best answer: A

What this tests: Organizing

Explanation: A responsibility assignment matrix links the WBS scope to the OBS responsibility structure and establishes control-account accountability. For reliable baseline control, each control account must have a clear accountable manager who owns the authorized budget, the earned-value method, actual-cost review, and variance response. Joint assignment of one control account to two managers without a defined budget or scope split creates ambiguity: progress could be claimed by one group, costs collected under one code, and variance explanations disputed between functions. Planning packages, unnamed future crew members, and level-of-effort work can be acceptable when they are properly authorized and controlled. The decisive weakness is the lack of single-point accountability for WBS 1.2.

A control account needs clear single-point accountability so earned value, actual costs, and variance response can be traced to an accountable manager.

Question 93

Topic: Account Considerations

At the July status date, the project controls analyst is reconciling actual costs from the accounting system to the earned value report. The EVMS procedure requires actual costs to be traceable to authorized work and reported by control account.

Which action is best supported by the exhibit?

• A. Allocate the generic charges between the two control accounts in proportion to each control account’s earned value.
• B. Assign all ENG-100 charges to the engineering department manager because both control accounts are in the same department.
• C. Use the GL account to assign costs because labor and material categories are sufficient for EVMS reporting.
• D. Establish a unique accounting charge code or cost collection link mapped to each authorized control account before loading actual costs to the EV report.

Best answer: D

What this tests: Account Considerations

Explanation: Actual cost traceability depends on a reliable link from accounting transactions to the authorized work being measured. In an EVMS environment, the key link is not just the project number, GL account, department, or vendor; it must identify the cost collection point that maps to the applicable control account, work package, or authorized charge number. Here, the same generic charge string can feed two different control accounts, so the reported actual cost cannot be matched with the earned value for each account. The correct action is to establish or enforce a unique accounting charge code or equivalent cost collection structure tied to authorized control accounts. That preserves reconciliation, variance analysis, and report credibility.

A control-account-level accounting link is needed so actual costs can be traced from transactions to authorized work and matched to earned value reporting.

Question 94

Topic: Analysis and Management Reports

At the May status date, the project controls lead is reviewing a control account forecast before it is included in the monthly management report.

Additional constraints:

• The CAM says the cost variance was caused by underestimated test rework and lower-than-planned craft productivity.
• The remaining scope is mostly the same type of integration and test work.
• The corrective action is a new test-fixture process, but it has not yet produced measured results.
• Accounting has identified USD 0.4 million of incurred subcontractor cost that is not yet included in AC.

What is the best professional judgment about the proposed EAC?

• A. The EAC should be replaced by BAC because baseline values remain the official cost objective until a change is approved.
• B. The EAC should be accepted if the CAM commits to the corrective action in the variance analysis report.
• C. The EAC is credible because it is higher than BAC and therefore already acknowledges the unfavorable performance trend.
• D. The EAC is not credible until it is revised to reflect current performance, the missing incurred cost, remaining-scope risk, and evidence for any recovery assumption.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: A credible EAC must be traceable to current performance, remaining work, known cost exposure, and supportable recovery assumptions. Here, CPI is unfavorable because EV is USD 6.0 million while AC is USD 7.5 million, and the remaining work is similar to the work that caused the variance. The proposed EAC of USD 12.3 million is only slightly above BAC, yet it does not account for USD 0.4 million of incurred cost missing from AC and relies on an unproven corrective action. A forecast may assume improved performance only when the basis is documented and supported by evidence, such as measured productivity improvement or reduced technical risk. Baseline approval rules do not prevent updating the forecast; they prevent unauthorized changes to the performance measurement baseline.

The proposed EAC assumes recovery that is not yet supported and omits known cost and risk information needed for a defensible forecast.

Question 95

Topic: Perform Budgeting Duties

A control account manager is preparing the month-end earned value report. The status date is March 31, and values are shown in $000. Planned value is to be reported cumulatively from the authorized performance measurement baseline through the status date.

What planned value should be reported for the control account at the status date?

• A. $430,000, because all authorized budget through April is part of the control account baseline.
• B. $300,000, because only authorized baseline budget scheduled through March is included.
• C. $140,000, because only the March budget is included at the March status date.
• D. $340,000, because the March supplier change request is scheduled in the same reporting period.

Best answer: B

What this tests: Perform Budgeting Duties

Explanation: Planned value is the time-phased budget for authorized work scheduled to be accomplished as of the status date. Here, the March 31 PV is cumulative through March, not just the March slice. WP-10 contributes $200,000 and WP-20 contributes $100,000 through March. WP-30 has no budget scheduled until April, so it contributes nothing at March 31. The supplier change request is not approved, so it is not part of the performance measurement baseline and cannot be included in PV. Therefore, the reportable PV is $300,000.

Cumulative PV through March is 50 + 70 + 80 + 40 + 60 = 300 in $000, excluding future and unapproved budget.

Question 96

Topic: Analysis and Management Reports

A project controls analyst is preparing the monthly earned value management report for a control account at the May status date. The baseline has not been revised this month, actual costs have been reconciled to the accounting system, and the reporting procedure requires variance analysis when either SPI or CPI is below 0.90.

What is the best professional judgment for the report?

• A. Report unfavorable schedule and cost performance, with SPI = 0.88 and CPI = 0.83, and request variance analysis and forecast review.
• B. Report favorable schedule performance because actual cost exceeds planned value, and focus the narrative on spending ahead of plan.
• C. Report only a schedule problem because earned value is below planned value, but defer cost discussion until year-end accounting closes.
• D. Revise the performance measurement baseline to match the actual cost so that the May report reflects current execution reality.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Schedule variance is calculated as EV − PV, so the control account has SV = $1,050,000 − $1,200,000 = −$150,000. SPI is EV ÷ PV = 0.875, or about 0.88. Cost variance is EV − AC, so CV = $1,050,000 − $1,260,000 = −$210,000. CPI is EV ÷ AC = 0.833, or about 0.83. Because both SPI and CPI are below the 0.90 reporting threshold, the report should clearly identify both unfavorable conditions and trigger variance analysis. Since actual costs are reconciled and no approved baseline revision exists, the proper action is analysis and forecast review, not baseline adjustment or deferral.

EV is less than PV and AC is greater than EV, so both schedule and cost performance breach the stated threshold.

Question 97

Topic: Analysis and Management Reports

At the month 8 status date, a control account manager is preparing the forecast for a management report.

• BAC: USD 2,000,000
• EV: USD 900,000
• AC: USD 1,125,000
• CPI: 0.80
• SPI: 0.90
• Constraints: the performance measurement baseline is unchanged, no scope change has been approved, and the program forecasting procedure says to use cumulative CPI unless a documented recovery plan justifies another method.

What is the best professional judgment for the report?

• A. Report EAC of USD 2,347,000 by blending CPI and SPI because both cost and schedule performance are unfavorable.
• B. Report EAC of USD 2,000,000 because the baseline is unchanged and no scope change has been approved.
• C. Report ETC of USD 875,000 because the remaining budget equals BAC minus AC.
• D. Report EAC of USD 2,500,000, ETC of USD 1,375,000, and VAC of USD -500,000; note that meeting BAC would require a remaining-work CPI of about 1.26.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: The forecast should preserve baseline integrity while showing the expected cost outcome from current performance. With no approved scope change and no documented recovery plan, the stated procedure requires a cumulative CPI-based forecast. Remaining budgeted work is BAC − EV = USD 1,100,000. Dividing that by CPI 0.80 gives an ETC of USD 1,375,000. Adding current AC of USD 1,125,000 gives an EAC of USD 2,500,000. Therefore, VAC = BAC − EAC = USD -500,000. The TCPI to finish at BAC is (BAC − EV) / (BAC − AC) = 1,100,000 / 875,000, or about 1.26, which is a major improvement over the current CPI of 0.80 and should be highlighted as a forecast credibility concern.

Using cumulative CPI, EAC = AC + (BAC − EV) / CPI, and the TCPI to meet BAC is (BAC − EV) / (BAC − AC).

Question 98

Topic: Analysis and Management Reports

At the June 30 status date, a cost-reimbursable subcontract is on the critical integration path and represents 30% of the project’s remaining ETC. The project-level EAC will be submitted to the customer tomorrow.

• Subcontractor report: PV $5.0 million, EV $3.6 million, AC $4.5 million, BAC $10.0 million, EAC $10.0 million.
• Subcontractor forecast basis: “additional crews will recover performance by August.”
• Prime acceptance records show 45 of 70 planned test points accepted.
• Accounting has $0.3 million of June labor accrual not included in the subcontractor AC.
• A $0.7 million subcontract change request is pending but not approved.

The customer requires EACs to be based on objective performance and authorized scope. Which action best supports a credible project-level EAC and management action?

• A. Add the pending $0.7 million change request to BAC and EAC so the project forecast reflects the most likely final subcontract cost.
• B. Reconcile AC with the June accrual, require a supported ETC based on accepted progress and productivity, exclude the pending change from authorized baseline EAC, and disclose it separately for decision.
• C. Use the subcontractor’s $10.0 million EAC and describe the added crews as the corrective action.
• D. Add only the $0.3 million accrual to AC and keep the subcontractor EAC unchanged because the pending change is not approved.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: A credible project-level EAC must integrate subcontract data only when the cost, progress, scope, and forecast basis are traceable. Here, the subcontractor’s EAC at BAC is not supported by current performance: EV is below PV, AC exceeds EV, accepted test points lag the plan, and the recovery statement is only an assertion. The prime also has an accounting reconciliation issue because June labor accrual is missing from subcontractor AC. The pending change may affect future cost, but it is not authorized scope and should not be folded into the baseline EAC as if approved. The best professional action is to reconcile actual cost, require a substantiated subcontract ETC using objective progress and productivity evidence, and communicate the pending change separately so management can decide on recovery, authorization, or contingency actions.

This preserves actual-cost traceability, uses objective subcontract performance for the forecast, and separates unauthorized change from the authorized-scope EAC.

Question 99

Topic: Analysis and Management Reports

At the May 31 status date, a control account has the following cumulative earned value data:

Use these formulas: CV = EV - AC; CV% = CV / EV; SV = EV - PV; SV% = SV / PV. An adverse variance requires formal variance analysis if its dollar magnitude is at least $250,000 or its percent magnitude is at least 8.0%.

Which management-report conclusion is best supported?

• A. Neither cost nor schedule variance exceeds the threshold, so the report should show the control account as within tolerance.
• B. Both cost and schedule variances exceed the threshold, so both require formal variance analysis and corrective-action plans.
• C. Schedule variance is adverse by $320,000 and 10.0%, so it exceeds the threshold; cost variance is adverse by $144,000 and 5.0%, so it is below the threshold.
• D. Cost variance is adverse by $144,000 and 5.0%, so it exceeds the threshold; schedule variance is adverse by $320,000 and 10.0%, so it is below the threshold.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: Variance reporting should combine the arithmetic result with the reporting threshold. The cost variance is EV - AC, or $2,880,000 - $3,024,000 = -$144,000. As a percentage of EV, -$144,000 / $2,880,000 = -5.0%, so the adverse cost variance does not meet the $250,000 or 8.0% threshold. The schedule variance is EV - PV, or $2,880,000 - $3,200,000 = -$320,000. As a percentage of PV, -$320,000 / $3,200,000 = -10.0%, so the adverse schedule variance exceeds the threshold. The management report should therefore focus formal variance analysis, root cause, and corrective action on schedule performance, while continuing to monitor cost performance.

SV is -$320,000 and -10.0%, meeting both schedule thresholds, while CV is -$144,000 and -5.0%, below both cost thresholds.

Question 100

Topic: Analysis and Management Reports

A control account for qualification testing is at the month 8 status date. Cumulative performance is:

Constraints:

• CPI has declined for three consecutive periods, and current SPI is 0.85.
• Only two test-facility windows remain; missing the next window would drive a six-week slip.
• Overtime is capped at 10%, and the subcontractor cannot add a second shift.
• A related customer change is still pending approval, and the sponsor needs a recommendation before a funding review in five working days.

What is the best risk mitigation action for the earned value analyst to recommend?

• A. Move management reserve into the control account now so the forecast overrun is covered before the funding review.
• B. Delay escalation until next month so the team can demonstrate whether the next test window is actually missed.
• C. Prepare a decision package that quantifies the variance trend, EAC/VAC exposure, feasible recovery alternatives within the resource constraints, and the approval needed for the recommended mitigation.
• D. Revise the performance measurement baseline to include the pending customer change and reset the control account variances.

Best answer: C

What this tests: Analysis and Management Reports

Explanation: The data show both schedule and cost pressure: CPI is about 0.88 and SPI is 0.85, with an EAC of £13.6 million against a £12.0 million BAC. Because the trend is worsening and the next test window is a near-term schedule constraint, management needs more than a variance narrative. The analyst should support a mitigation decision by quantifying forecast exposure, identifying recovery actions that are actually feasible under the overtime and subcontractor limits, and making clear what authorization is required. A pending customer change should not be incorporated into the performance measurement baseline until approved. Management reserve also should not be used simply to hide or absorb poor performance without an approved management action and clear forecast basis.

This action links the unfavorable trend to forecast exposure, tests recovery feasibility against known constraints, and gives the sponsor a timely decision basis.

Questions 101-120

Question 101

Topic: Revisions and Data Maintenance

At the month-end status date, a control account has no approved scope change pending. The EVMS procedure requires actual cost to include costs incurred for work performed through the status date, including required accruals, but to exclude commitments for future work. The project manager is reconciling the EV report before it is issued.

What is the best professional action or judgment for the report?

• A. Include both the accrual and the open commitment in AC and report a cumulative cost variance of $70,000 unfavorable.
• B. Keep AC at $420,000 until the invoice is paid and report a cumulative cost variance of $80,000 favorable.
• C. Reconcile AC to $480,000, exclude the $90,000 commitment, and report a cumulative cost variance of $20,000 favorable.
• D. Increase BAC by $90,000 for the commitment and leave current-period AC unchanged.

Best answer: C

What this tests: Revisions and Data Maintenance

Explanation: For EVMS reconciliation, actual cost should reflect costs incurred for authorized work performed through the status date. A required accrual for services already received is an incurred cost even if it has not yet posted or been paid. An open commitment for material not yet received is not actual cost; it is a procurement obligation for future cost recognition. Therefore, reconciled AC is $420,000 + $60,000 = $480,000. With EV of $500,000, cumulative cost variance is EV − AC = $20,000 favorable. Because there is no approved scope change, BAC and the performance measurement baseline should not be changed to absorb a commitment or improve the report.

The incurred but unposted accrual belongs in AC, while the future commitment does not, so CV is $500,000 − $480,000 = $20,000 favorable.

Question 102

Topic: Account Considerations

At the May status date, an EV analyst is preparing the monthly EVMS performance report. The project controls file contains actual costs imported from a spreadsheet, but finance states that the corporate accounting system is the system of record. The report must be reconcilable by control account and cost element, and May accruals were posted after the preliminary extract. Which data check best validates whether the actual costs are reconcilable with the accounting system for EVMS use?

• A. Tie EVMS actual costs by control account, cost element, and status period to the accounting transaction detail and posted accruals, documenting any timing or mapping reconciling items.
• B. Compare actual costs to earned value and planned value, then investigate only control accounts with cost or schedule variances above the reporting threshold.
• C. Ask each control account manager to confirm that the spreadsheet actual-cost totals appear reasonable for the work performed in May.
• D. Replace the EVMS actual costs with vendor invoice amounts and cash payments received before the status date to avoid accrual timing differences.

Best answer: A

What this tests: Account Considerations

Explanation: For EVMS use, actual costs must be traceable to and reconcilable with the accounting system, not merely reasonable or useful for variance analysis. The best validation checks the EVMS actual-cost values against accounting transaction detail at the level needed for reporting, such as control account, cost element, and accounting period. Because accruals were posted after the preliminary extract, the reconciliation must also address status-period cutoff and timing differences. Documented reconciling items show whether differences are explainable rather than hidden data-quality problems. Variance analysis and manager judgment may support performance interpretation, but they do not prove that actual costs reconcile to the official accounting records.

This check directly confirms traceability from EVMS actual costs to the accounting source of record at the required level of control detail.

Question 103

Topic: Account Considerations

A project controls analyst is reconciling the May status for control account CA-220 before the customer EVMS report is issued.

Which interpretation is best supported by the exhibit?

• A. CA-220 has a control-account accounting cutoff problem; May AC should include the accepted installed material through an accrual or reconciliation entry.
• B. CA-220 should reduce EV until the supplier invoice is received and the customer progress payment is made.
• C. CA-220 needs a baseline change because the accepted material cost exceeds the posted accounting cost for May.
• D. CA-220 should request management reserve because the May cost variance is caused by material cost growth.

Best answer: A

What this tests: Account Considerations

Explanation: The decisive issue is the relationship between the status cutoff and actual-cost recognition. The exhibit shows that material was installed and accepted before the May 31 status date, but the invoice had not yet been received and the cost was not posted. For earned value reporting, AC should reflect costs incurred for authorized work through the status date, commonly by accrual or reconciliation when invoices lag. This is a control-account accounting and cutoff problem, not a reason to change the performance measurement baseline. It is also not a contract-payment issue; cash timing and progress payments do not determine earned progress or incurred cost. Management reserve is not appropriate because no approved scope change or reserve draw is identified.

The accepted material belongs in May actual cost for the control account even though the supplier invoice and customer payment occur later.

Question 104

Topic: Analysis and Management Reports

A control account manager asks whether the cumulative CPI should be applied to all remaining work in the EAC. Values are cumulative at the June status date and in USD millions.

• Variance analysis: 7.0 of the overrun came from completed prototype rework caused by a design defect that has been corrected.
• Remaining work: 42.0 is a definitized fixed-price fabrication subcontract; 22.0 is internal installation using the corrected design.
• Recent internal installation performance after the correction has been near plan, and no scope change has been approved.

Which forecasting judgment is best supported by the exhibit?

• A. Apply the cumulative CPI of 0.80 to all remaining work because it is the most objective basis for EAC.
• B. Prepare a segmented ETC that preserves the current variance but reflects the corrected design and different remaining work conditions.
• C. Revise the baseline to remove the prototype rework overrun before calculating future cost performance.
• D. Set EAC equal to BAC because the design defect has been corrected and remaining performance is near plan.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: A cumulative CPI of 36.0 / 45.0 = 0.80 indicates unfavorable cost performance to date, but EAC forecasting should consider whether past performance is representative of remaining work. Here, a major part of the overrun came from completed prototype rework caused by a corrected design defect. The remaining work also has a different cost-risk profile: a fixed-price subcontract and internal installation using the corrected design. The current variance should remain visible in performance history, but the ETC should be developed by segmenting the remaining work and documenting the assumptions. Mechanically applying the cumulative CPI to all remaining work would likely overstate future cost growth if the prior conditions no longer apply.

The cumulative CPI is relevant history, but the completed one-time rework and changed remaining work mix make a mechanical CPI extension inappropriate.

Question 105

Topic: Account Considerations

At the March 31 status cutoff, control account CA-220 has earned value (EV) of $480,000. The accounting ledger shows actual cost (AC) of $455,000. Reconciliation identifies two cutoff items:

• $35,000 of subcontract work was performed and accepted before March 31, but the invoice has not been accrued.
• $15,000 was paid in March for April field mobilization and should not be included as March earned-value actual cost.

Use CV = EV - AC and CPI = EV / AC. Which statement best describes the reconciled control-account result?

• A. Adjusted AC is $440,000; CV is $40,000 favorable; CPI is 1.09, so the control account has strong cost efficiency.
• B. Adjusted AC is $475,000; CV is $5,000 favorable; CPI is 1.01, so the control account is essentially on budget after cutoff reconciliation.
• C. Adjusted AC is $490,000; CV is $10,000 unfavorable; CPI is 0.98, so the control account has a cost overrun.
• D. Adjusted AC remains $455,000; CV is $25,000 favorable; CPI is 1.05, so the control account is materially underrunning cost.

Best answer: B

What this tests: Account Considerations

Explanation: Actual cost for earned-value reporting should reflect costs incurred for work performed by the status cutoff, not simply cash paid or invoices received. The accepted subcontract work occurred before March 31, so it should be accrued into AC. The April mobilization payment does not support work performed by the March 31 cutoff, so it should be removed from March AC. After these reconciliation adjustments, AC becomes $475,000. Comparing EV of $480,000 to adjusted AC gives a small favorable cost variance of $5,000 and a CPI of about 1.01. The professional conclusion is that the control account is roughly on budget after proper cutoff treatment, rather than significantly underrunning or overrunning cost.

The reconciled AC is $455,000 + $35,000 - $15,000 = $475,000, giving CV = $5,000 favorable and CPI = 1.01.

Question 106

Topic: Revisions and Data Maintenance

A control account manager submits the following approved data maintenance correction before the April customer performance report is issued. The project uses cumulative CPI for the monthly EAC unless a documented management forecast supersedes it.

Which interpretation is best supported by the correction?

• A. April AC should be increased by $80,000 so the duplicate EV is offset without changing reported schedule variance or the EAC trend.
• B. BAC and the performance measurement baseline should be reduced by $80,000 because invalid earned value indicates that less authorized work remains.
• C. March results should remain as reported, and the $80,000 should be shown only as an April current-period unfavorable variance to preserve historical reports.
• D. March CV and SV become $80,000 more unfavorable, April CPI decreases, EAC increases, and the customer report should disclose the prior-period correction with an audit trail.

Best answer: D

What this tests: Revisions and Data Maintenance

Explanation: A retroactive correction to duplicate earned value changes the affected historical EV record, not the authorized budget or actual cost. Because EV is reduced by $80,000, March cost variance and schedule variance each become $80,000 more unfavorable. The same correction also lowers April cumulative EV from $1,100,000 to $1,020,000, so cumulative CPI decreases from 0.88 to 0.816. Under the stated EAC rule, a lower CPI increases the formula-based EAC. The professional reporting response is to restate the affected prior-period data, preserve the audit trail, and explain the effect on current forecast and trends. It is not appropriate to hide the correction in the current period, alter actual costs, or change the baseline without an authorized scope or budget change.

Removing previously overstated EV worsens prior variances, lowers current cumulative CPI, increases the formula-based EAC, and requires transparent stakeholder reporting.

Question 107

Topic: Analysis and Management Reports

A monthly customer earned value submittal is due for a control account that exceeds the contract variance threshold. The report must disclose variance causes, corrective actions, and forecast risk.

As of the status date:

• PV: $2.50M; EV: $2.20M; AC: $2.45M
• Current EAC: $5.40M versus BAC of $5.00M
• Root cause: two weeks of tooling downtime
• Corrective action: a second shift started this week and the tooling vendor has committed repair support
• Constraint: no post-action productivity data are available yet, and no baseline change has been approved

Which wording should be used in the customer report?

• A. Report that the account will return to plan next month because the second shift and repair commitment are sufficient to recover the variance.
• B. Report a baseline date adjustment to align with the repair schedule, reducing the reportable schedule variance.
• C. Report only the corrective actions this cycle and defer the $5.40M EAC discussion until recovery data are available.
• D. Report that the account is behind plan, the downtime caused the variance, the second shift and repair are corrective actions, and the $5.40M EAC remains at risk until post-action performance is measured.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Customer earned value reporting should be evidence-backed and decision-oriented. The data show both schedule and cost weakness: EV is below PV, AC is above EV, and the EAC exceeds BAC. The report should identify the known cause, state the corrective action, and disclose the remaining forecast risk. Because the second shift and vendor support have just begun, there is not yet objective performance evidence that recovery is working. A professional report can say the actions are underway, but it should not promise recovery or suppress the forecast impact. It also should not revise the baseline unless an approved change authorizes that action. The best wording preserves transparency while giving the customer a clear view of the issue, response, and uncertainty.

This wording is factual, discloses the variance cause and corrective action, and avoids claiming recovery before evidence exists.

Question 108

Topic: Organizing

A project controls lead is reviewing the EVMS setup before the integrated baseline review. The project has these constraints:

• The WBS is approved and decomposes the product into deliverables.
• Each control account must have one accountable manager for cost, schedule, and technical performance.
• Finance has already assigned cost account codes for labor and material charging.
• Procurement uses contract package names that do not match the internal organization.

What is the best way to use the OBS in this setup?

• A. Map the approved WBS deliverables to the responsible organization and name the accountable control account managers in the RAM.
• B. Replace the WBS lower levels with functional department names so each team can report progress directly.
• C. Use the finance cost account codes as the OBS because they are already used for actual-cost collection.
• D. Use procurement contract package names as the OBS so subcontractor reporting aligns with purchase orders.

Best answer: A

What this tests: Organizing

Explanation: In an EVMS control structure, the WBS describes the project scope by deliverable, while the OBS identifies the organization responsible for performing and managing the work. The two are linked through the responsibility assignment matrix to establish control accounts and accountable managers. Cost account codes support cost collection and traceability, but they do not by themselves define managerial responsibility. Functional reporting lines may help show who reports to whom, but they should not replace the deliverable-oriented WBS. Contract package names may be useful for procurement administration, yet they are not a substitute for the internal responsibility structure needed for earned value accountability.

The OBS identifies organizational responsibility and, when linked to the WBS in the RAM, supports accountable control account ownership.

Question 109

Topic: Organizing

A contractor is setting up the EVMS control structure for an approved engineering and installation scope. The project manager wants the WBS to use the same first two levels as the functional organization chart so each department can report its own work. The cost team also wants to use the accounting cost-code list as the WBS numbering system. The contract requires earned value to be traceable to authorized deliverables, and control account managers must be accountable for measurable scope. What is the best professional judgment?

• A. Use the schedule activity list as the WBS because earned value will be statused from completed activities.
• B. Use the functional organization chart as the WBS because control account managers are assigned by department.
• C. Use the accounting cost-code list as the WBS because actual costs must reconcile to the accounting system.
• D. Build the WBS around contract deliverables, then map departments and cost codes to the appropriate control accounts through the RAM and coding structure.

Best answer: D

What this tests: Organizing

Explanation: In an EVMS, the WBS should decompose the authorized project scope into deliverable-oriented elements. It is not the same as an organization chart, cost-code list, schedule activity list, or reporting hierarchy. The OBS identifies responsible organizations, cost codes support accounting collection, and schedule activities support time-phased execution and status. These structures should be cross-referenced, not substituted for the WBS. In this situation, the contract requirement for traceability to authorized deliverables is decisive. A deliverable-based WBS provides the scope framework for control accounts, while the RAM links WBS elements to responsible managers and accounting codes support actual-cost traceability.

A deliverable-oriented WBS preserves scope traceability while allowing responsibility and accounting codes to be mapped without replacing the WBS.

Question 110

Topic: Analysis and Management Reports

A control account manager is preparing the month-end variance report for a work package. The project control procedure requires a formal variance analysis when an unfavorable cost or schedule variance meets both the dollar and percentage thresholds.

Which interpretation is supported by the exhibit?

• A. Only the cost variance exceeds the reporting threshold and needs formal root-cause and corrective-action discussion.
• B. Neither variance exceeds the reporting threshold because the work package has earned most of its planned value.
• C. Both cost and schedule variances exceed the reporting threshold because both are at least $150,000 unfavorable.
• D. Only the schedule variance exceeds the reporting threshold because the schedule dollar variance equals $150,000.

Best answer: A

What this tests: Analysis and Management Reports

Explanation: Variance threshold status should be based on the stated reporting rule, not on a general impression of progress. Cost variance is calculated as EV minus AC: $1,650,000 - $1,820,000 = -$170,000. Using the stated formula, CV% is -$170,000 / $1,650,000 = -10.3%, so the cost variance meets both the dollar and percentage thresholds. Schedule variance is EV minus PV: $1,650,000 - $1,800,000 = -$150,000. Although the schedule variance meets the dollar threshold, SV% is -$150,000 / $1,800,000 = -8.3%, so it does not meet the 10.0% percentage threshold. The supported management-reporting action is to formally address the cost variance with cause and corrective action while monitoring the schedule variance under the stated rule.

CV is $170,000 unfavorable and 10.3% unfavorable, while SV is $150,000 unfavorable but only 8.3% unfavorable.

Question 111

Topic: Perform Budgeting Duties

At the May 31 status date, a project controls analyst is reconciling budget categories for the monthly earned value report. Use the project rule: undistributed budget is approved budget for authorized scope that has not yet been distributed to control accounts.

• Distributed control account budgets: $18,000,000, including $2,200,000 in planning packages for future work inside assigned control accounts
• Management reserve: $1,500,000, held outside the performance measurement baseline
• Approved customer change CR-17: $900,000 of new authorized scope; work is authorized, but budget has not yet been assigned to control accounts
• Pending supplier redesign trend: estimated $300,000; not yet approved
• Cumulative earned value data: EV = $7,200,000 and AC = $7,800,000

What should be reported as undistributed budget, and what is the correct budgeting treatment?

• A. $900,000; report CR-17 as undistributed budget until it is allocated to control accounts through baseline change control.
• B. $600,000; report the unfavorable cost variance as undistributed budget needed to cover overrun recovery.
• C. $1,500,000; report management reserve as undistributed because it has not been assigned to control accounts.
• D. $2,200,000; report the planning-package budget as undistributed until detailed work packages are opened.

Best answer: A

What this tests: Perform Budgeting Duties

Explanation: Undistributed budget is not simply any budget that lacks detailed work-package planning. It is budget for authorized work that has been approved but not yet distributed to control accounts. In this case, CR-17 has been approved for $900,000 and the scope is authorized, but the budget has not yet been assigned to control accounts, so it is undistributed budget. Planning-package budget is already inside assigned control accounts and supports future work that is not yet planned in detail. Management reserve is held outside the performance measurement baseline for unknowns within scope and is not undistributed budget. The cost variance is performance data, calculated as EV - AC, and does not create budget authority.

The approved change is authorized scope with budget not yet distributed to control accounts, which is the defining condition for undistributed budget.

Question 112

Topic: Revisions and Data Maintenance

At the May 31 status date, a control account was reported as follows:

During reconciliation on June 5, the project controls analyst finds two errors affecting the May 31 report:

• A subcontract accrual of $160,000 for work performed before May 31 was omitted from AC.
• A $200,000 milestone was claimed at 100%, but the approved measurement rule and completion evidence support only 50% earned by May 31.

Use CPI = EV / AC. There is no approved scope change or baseline change. What is the best action?

• A. Leave the May 31 report unchanged and book the $160,000 accrual and $100,000 EV reduction as June current-period performance.
• B. Correct the May 31 cumulative EV to $800,000 and AC to $1,010,000, document the audit trail, and issue a corrected performance report showing CPI of about 0.79.
• C. Revise the May 31 baseline PV downward by $210,000 so the corrected CPI remains close to the originally reported value.
• D. Wait until the subcontractor invoice is paid, then update AC and EV together in the next regular customer report.

Best answer: B

What this tests: Revisions and Data Maintenance

Explanation: Reconciliation of EVMS data should preserve performance integrity. The omitted accrual means AC was understated: $850,000 + $160,000 = $1,010,000. The unsupported milestone claim means EV was overstated: $900,000 - $100,000 = $800,000. The corrected CPI is $800,000 / $1,010,000, or about 0.79. Because these are reporting and data-quality errors at the status date, the professional action is to correct the cumulative performance data, keep an audit trail, explain the effect on prior reporting, and update management reporting and forecasts as appropriate. A baseline change is not justified because no approved scope or budget change exists.

The reconciliation identifies data errors, so the reported performance should be corrected with traceability rather than hidden in baseline or forecast changes.

Question 113

Topic: Analysis and Management Reports

At the May 31 status date, a control account manager is preparing the monthly earned-value analysis. The approved performance measurement baseline (PMB) contains only the original deliverable scope; no baseline change has added the risk-response activity as earned scope. Management has authorized a supplier-risk mitigation action, and the risk has not occurred.

Use:

• CPI for remaining baseline work = EV / baseline-scope AC
• ETC for remaining baseline work = (BAC - EV) / CPI
• Total EAC = total AC to date + ETC for remaining baseline work + remaining authorized risk-response cost

Which performance-analysis statement should be reported?

• A. Exclude the remaining $40,000 from EAC until the supplier risk actually occurs, while reporting the $60,000 already spent as earned value.
• B. Increase EV to $730,000 for the authorized mitigation and report that the control account is performing ahead of budget.
• C. Report a total EAC of $1,000,000 because the mitigation is outside the PMB and should not affect earned-value forecasts.
• D. Report a total EAC of $1,100,000, keep EV at $630,000, and describe the mitigation as forecast cost rather than earned progress.

Best answer: D

What this tests: Analysis and Management Reports

Explanation: Risk-response spending is not the same as earned performance unless the response activity is part of authorized baseline scope with defined accomplishment criteria. Here, EV remains $630,000 because only completed baseline deliverables earn value. Baseline-scope CPI is $630,000 / $630,000 = 1.00, so the ETC for remaining baseline work is ($1,000,000 - $630,000) / 1.00 = $370,000. The total EAC includes all actual cost already incurred, plus the remaining baseline ETC, plus the remaining authorized mitigation cost: $690,000 + $370,000 + $40,000 = $1,100,000. The correct management message is that mitigation cost is a forecast impact and cost-management issue, not evidence of additional physical progress.

The mitigation cost affects the forecast, but it does not create additional EV because it is not authorized baseline deliverable scope.

Question 114

Topic: Perform Planning and Scheduling Duties

A baseline planning team is reviewing a control account before the integrated baseline review. The risk register says the test article delivery date may slip by up to 10 business days, and receiving inspection is required before integration testing can begin.

Which mitigation action best protects the earned-value planning basis?

• A. Keep the current FS+0 logic and hold the $30,000 as management reserve until the delivery slip occurs.
• B. Add the receiving-inspection activity before test start, logic-link it to supplier delivery, phase the $30,000 mitigation budget to that work, and keep EV credit tied to objective milestones.
• C. Move part of the integration-test budget into September and allow EV credit when the test team is mobilized.
• D. Use a negative lag from delivery to test start so the schedule still shows the October finish date.

Best answer: B

What this tests: Perform Planning and Scheduling Duties

Explanation: A sound mitigation action should preserve the integrity of the schedule model and the performance measurement baseline. Here, receiving inspection is required work and is a logical predecessor to integration testing, but it is missing from the schedule. The authorized mitigation also has a budget that must be assigned and time-phased to the work it supports. Adding the activity, linking it to delivery, and retaining objective milestone-based EV prevents hidden logic, unsupported budget movement, and premature earned value. The mitigation does not eliminate the supplier risk, but it makes the planned response measurable and traceable within the control account.

This action makes the real dependency, mitigation work, budget phasing, and objective earned-value criteria visible in the baseline plan.

Question 115

Topic: Organizing

A project controls analyst is preparing the initial work authorization for a new control account. The project manager gives these constraints:

• Only work with Authorized baseline status may be opened for execution.
• In the RAM, A identifies the accountable control account manager and responsible OBS organization; S identifies a support organization.
• The control account must trace to one accountable WBS work element.

Which work authorization setup is best supported by the RAM?

• A. Open WBS 1.2.4 as the control account and assign Omar Patel as CAM because he is accountable for the related lab upgrade.
• B. Combine WBS 1.2.3 and 1.3.1 under Omar Patel to simplify earned value reporting for integration and testing.
• C. Open WBS 1.2.3 as the control account, assign Dana Lee in Avionics Software as CAM, and identify Systems Test as the support organization.
• D. Open WBS 1.2.3 as the control account and assign Omar Patel as CAM because Systems Test supports the integration work.

Best answer: C

What this tests: Organizing

Explanation: A responsibility assignment matrix links the WBS work element to the OBS organization responsible for managing that scope. The control account is normally established at that intersection, with the named accountable manager serving as the control account manager. Support organizations may contribute work, but they do not replace the accountable OBS assignment unless the RAM is changed through the proper authorization process. Here, WBS 1.2.3 is authorized, Avionics Software is marked accountable, and Dana Lee is named at that accountable intersection. Systems Test is marked only as support for that same work element. Pending-change work should not be opened for execution as an authorized control account, and combining separate WBS elements would weaken scope and responsibility traceability.

The authorized WBS element 1.2.3 has Dana Lee’s OBS marked accountable and Systems Test marked as support.

Question 116

Topic: Perform Budgeting Duties

A control account manager is preparing the month-end earned value update for a discrete installation work package. Review the status snapshot:

Which interpretation is best supported by the exhibit?

• A. Claiming 80% complete is appropriate because planned value indicates the amount of work scheduled by the data date.
• B. Claiming 86% complete from actual cost recorded is appropriate because actual cost is the most current measure of work performed.
• C. Claiming 72% complete from labor hours charged would overstate accomplishment because the accepted physical output supports only 38% earned progress.
• D. Claiming 100% complete is appropriate because the work package has no partial-credit rule for unfinished assemblies.

Best answer: C

What this tests: Perform Budgeting Duties

Explanation: For discrete work, the earned value measurement technique should reflect objective accomplishment of the authorized work scope. The exhibit states that credit is earned only when an assembly is installed and accepted. Therefore, the defensible earned progress is based on 38 accepted assemblies out of 100, or 38% of the work package budget. Labor hours charged, actual cost, and elapsed schedule plan may explain effort, spending, or timing, but they do not prove that the deliverable has been completed. A technique based on hours used would reward effort rather than completed work and would overstate accomplishment when productivity is below plan.

The exhibit shows that earned value should be tied to accepted assemblies, not effort expended or cost incurred.

Question 117

Topic: Perform Budgeting Duties

A control account manager is selecting a performance measurement technique for a 4-month work package to install 120 identical valve assemblies. Each assembly has the same budgeted labor content, can be counted independently, and earns contractual acceptance only after inspection sign-off. Supplier invoices will arrive in large batches that do not match installation progress, and the project manager wants to minimize subjective progress estimates. Which earned value technique best fits this work package?

• A. Use a 50/50 technique for each monthly installation work order regardless of the number accepted.
• B. Use level of effort because the work package spans several reporting periods.
• C. Use a units-complete technique that earns budget for each valve assembly after inspection acceptance.
• D. Use percent complete based on the installation supervisor’s monthly judgment of physical progress.

Best answer: C

What this tests: Perform Budgeting Duties

Explanation: A units-complete technique is appropriate when work consists of many similar, measurable items and completion can be verified objectively. Here, each valve assembly has the same budgeted labor content and earns acceptance only after inspection sign-off, so earned value can be credited in proportion to accepted units. This avoids confusing supplier invoice timing with physical progress and reduces measurement risk from subjective estimates. Level of effort is better for support activities that do not produce measurable discrete outputs. Fixed-formula methods such as 50/50 can be useful for short-duration, low-value tasks, but they would not reflect the actual number of accepted valves. Subjective percent complete is weaker when objective count and acceptance evidence are available.

The work is repetitive, objectively countable, and has clear acceptance evidence for each completed unit.

Question 118

Topic: Revisions and Data Maintenance

At the September status cutoff, the project controls lead is reviewing a proposed month-end adjustment for Control Account 2.3.

The proposed adjustment is to increase the control account budget by USD 280,000 and reduce management reserve by USD 130,000 so the reported VAC is zero. Which interpretation is best supported by the exhibit?

• A. Leave the baseline unchanged because the change was not incorporated before the September status cutoff.
• B. Reduce management reserve by USD 130,000 because the productivity trend has already increased the estimate at completion.
• C. Increase the baseline by USD 280,000 because the approved change and productivity trend both affect the expected final cost.
• D. Revise the baseline for the USD 150,000 approved scope change, update the forecast for the USD 130,000 productivity impact, and explain the remaining variance.

Best answer: D

What this tests: Revisions and Data Maintenance

Explanation: Baseline revisions should be tied to authorized changes, not used to absorb unfavorable performance. CR-21 is an approved scope change with authorized budget, so it should be incorporated through baseline change control. The productivity trend is cost growth on the original authorized scope; it should affect the EAC or ETC and be addressed in the variance explanation and corrective action, not added to the performance measurement baseline to erase VAC. Management reserve is controlled separately from the PMB and should not be reduced merely to offset an overrun or create a zero variance. The untriggered supplier risk also does not justify a current baseline or actual-cost adjustment.

Only the authorized scope change supports a baseline revision; the productivity impact belongs in forecast and variance analysis.

Question 119

Topic: Analysis and Management Reports

At the June 30 status date, a draft customer report mixes legacy and current earned-value terms for one control account. Use these equivalences: BCWS = PV, BCWP = EV, and ACWP = AC. Use SV = EV - PV and CV = EV - AC.

The draft report labels BCWP as PV and BCWS as EV, then states that the control account is ahead of schedule. What is the best response?

• A. Correct only the cost variance to -$30,000 and leave the schedule statement unchanged because actual cost does not affect schedule variance.
• B. Correct the terminology to PV = $250,000, EV = $200,000, and AC = $230,000; report SV = -$50,000 and CV = -$30,000, indicating unfavorable schedule and cost performance.
• C. Accept the draft because BCWP is the planned value of work and BCWS is the earned value of completed work, making SV = $50,000 favorable.
• D. Report the account as on schedule and over cost because the average of PV and EV equals the recorded actual cost of $230,000.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: Legacy earned-value terminology must be translated consistently before interpreting performance. BCWS is the budgeted cost of work scheduled, which is the same as planned value. BCWP is the budgeted cost of work performed, which is the same as earned value. ACWP is actual cost. At the June 30 status date, PV is $250,000, EV is $200,000, and AC is $230,000. Therefore, SV = EV - PV = $200,000 - $250,000 = -$50,000, showing less work was earned than planned. CV = EV - AC = $200,000 - $230,000 = -$30,000, showing the work performed cost more than its earned budgeted value. The professional response is to correct the mixed labels before management uses the report.

BCWS maps to PV, BCWP maps to EV, and ACWP maps to AC, so both schedule and cost variances are unfavorable at the status date.

Question 120

Topic: Analysis and Management Reports

As of the June 30 status date, a control account has no approved scope change and no approved management reserve request. Management rules state that CPI or SPI below 0.95 requires corrective action, and a forecast VAC greater than 5% of BAC must be disclosed in the monthly management report. Use:

• \(CPI = EV / AC\)
• \(SPI = EV / PV\)
• \(EAC = AC + (BAC - EV) / CPI\), assuming current cost efficiency continues
• \(VAC = BAC - EAC\)

Values are in thousands of dollars.

Which management decision is best supported by the data?

• A. Revise the baseline BAC to about $5.56 million because the calculated EAC exceeds the current BAC.
• B. Disclose an EAC of about $5.56 million, initiate corrective action, and leave the PMB unchanged unless a valid change or reserve action is approved.
• C. Move about $0.56 million from management reserve into the PMB to offset the forecast overrun.
• D. Report the control account as within tolerance because cumulative AC equals cumulative PV at the status date.

Best answer: B

What this tests: Analysis and Management Reports

Explanation: The performance data indicates both schedule and cost weakness. CPI is \(2,700 / 3,000 = 0.90\), and SPI is \(2,700 / 3,000 = 0.90\), so corrective action is required. Using the stated forecast method, EAC is \(3,000 + (5,000 - 2,700) / 0.90 \approx 5,556\), producing a VAC of about -556, or -11.1% of BAC. That exceeds the 5% disclosure rule. Because there is no approved scope change or approved reserve request, the PMB should not be changed merely to absorb poor performance. The appropriate management response is transparent forecast disclosure and corrective action while preserving baseline integrity.

CPI and SPI are both 0.90, and the forecast VAC is about -$0.56 million, exceeding the disclosure threshold without justification for changing the baseline.

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Focused topic pages

• 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: Analysis and Management Reports
• AACE EVP: Revisions and Data Maintenance

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