Cost Management Question 9

[admin]

What would be the BEST explanation for the following. Both the cost variance and the schedule variance are negative, but the cost variance is lower than the schedule variance.

a) The project under spent because all work was not completed, but overspent for work that was done.
b) The project overspent due to increased costs yet completed some activities faster.
c) The project activities took longer than expected, but costs were lower.
d) The project underspent, because costs were lower than planned and activities were easier to complete than planned.

[admin]

The correct answer is A.

Remember that for variances, negative is bad. In this situation, both the variances are negative. To answer the question, first look for which one of the four choices exhibits negative variances for both cost and schedule. Choice B exhibits negative variance for cost and positive variance for schedule. Choice C exhibits positive variance for cost and negative variance for schedule. Choice D exhibits positive variances for both. Only choice A exhibits both cost and schedule variances as negative.

Revise Cost Management Concepts: Project Cost Management

Quiz:
20 Questions Challenge
50 Questions Challenge

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