PMP Exam – Cost Management – 001


The customer responsible for overseeing your project asks you to provide a written cost estimate that is 30 percent higher than your estimate of the projects cost. He explains that the budgeting process requires managers to estimate pessimistically to ensure enough money is allocated for projects. What is the best way to handle this?

  • A. Add the 30 percent as a lump sum contingency fund to handle project risks.
  • B. Add the 30 percent to your cost estimate by spreading it evenly across all project activities.
  • C. Create one cost baseline for budget allocation and a second one for the actual project management plan.
  • D. Ask for information on risks that would cause your estimate to be too low.

1 thought on “PMP Exam – Cost Management – 001

  1. Stramb Gabor

    The correct answer is D.
    Explanation :
    Simply showing you original estimate is not precise hence inaccurate.
    If the risk and cost are justified, budget can be increased.

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