# Project Monitoring and Controlling

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These questions are derived from the Self Test Software Practice Test for the Project Management Institute exam #PMP3ED – Project Management Professional Third Edition

Objective : Project Monitoring and Controlling

SubObjective : Cost Control

You are managing a project that was originally scheduled to take 12 months to complete. The original budget was \$486,000, or \$40,500 each month. At the end of the month, you are evaluating progress. You have completed 40 percent of the work and have \$90,000 remaining of your budget. What is your EAC?

1. \$194,400
2. \$396,000
3. \$595,836.73
4. \$991,836.73

D. \$991,836.73

Tutorial:

Your Estimate at Completion (EAC) is \$991,836.73. To arrive at the EAC, you perform the following calculations:

BAC = \$486,000

AC = \$486,000 – \$90,000 = \$396,000

EV = BAC x percent complete = \$486,000 x .40 = \$194,400

CPI = EV / AC = \$194,400 / \$396,000 = .49

Then, you can use the following formula to calculate the EAC:

EAC = BAC / CPI = \$486,000 / .49 = \$991836.73

All of the other options are incorrect because they do not reflect the correct EAC value.

Reference:

1. A Guide to the Project Management Body of Knowledge – PMBOK Guide 3rd Edition – Project Cost Management – 7.3.2 Cost Control: Tools and Techniques

2. A Guide to the Project Management Body of Knowledge – PMBOK Guide 3rd Edition – Glossary – Estimate at Completion (EAC)