Construction Project Cost Control Quiz
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Questions and Answers

What is the amount the job is over budget by after spending 4,700 mhrs?

  • 1,600 mhrs (correct)
  • 2,500 mhrs
  • 1,200 mhrs
  • 2,100 mhrs

    • What percentage of the job's total scope was completed after 6 months?

  • 52% of 96 units (correct)
  • 50 units
  • 55% of 96 units
  • 45 units

    • How much money was the project under budget after 6 months, given the budget of $12 million and $5 million spent?

  • $1.25 million (correct)
  • $1 million
  • $2 million
  • $2.5 million

    • How far behind schedule is the job after 4.3 months, given a planned completion of 2.5 months for the completed work?

    <p>1.8 months</p> Signup and view all the answers

    What does a CPI (Cost Performance Index) less than 1 indicate about a project?

    <p>The project is over budget</p> Signup and view all the answers

    What does an SPI (Schedule Performance Index) greater than 1 indicate about a project?

    <p>The project is ahead of schedule</p> Signup and view all the answers

    Which of the following describes 'Actual Cost of Work Performed' (ACWP)?

    <p>The actual expenditures for completed work at a specific time</p> Signup and view all the answers

    Which formula correctly reflects how to calculate the total earned value (BCWP) for the project based on percent complete?

    <p>Percent complete * Total contract</p> Signup and view all the answers

    What does a cost variance (CV) greater than zero indicate?

    <p>The project is under budget.</p> Signup and view all the answers

    How is schedule variance (SV) calculated?

    <p>SV = BCWP – BCWS</p> Signup and view all the answers

    In the context of earned value management, what does an SPI greater than 1.0 signify?

    <p>The project is ahead of schedule.</p> Signup and view all the answers

    What does a Cost Performance Index (CPI) of 1.25 imply about the project's performance?

    <p>For every dollar spent, $1.25 worth of work is accomplished.</p> Signup and view all the answers

    If a project has a BCWP of $6,250,000 and a BCWS of $6,000,000, what is the schedule variance (SV)?

    <p>$250,000</p> Signup and view all the answers

    Which of the following correctly defines the term 'ACWP'?

    <p>Actual Cost of Work Performed</p> Signup and view all the answers

    If the project scope is 96 units at a cost of $12 million, what is the cost per unit?

    <p>$125,000</p> Signup and view all the answers

    What does a negative cost variance (CV) indicate about a project's financial status?

    <p>The project is underperforming and over budget.</p> Signup and view all the answers

    What is the projected cost of completing the brick laying job?

    <p>$22,500</p> Signup and view all the answers

    What is the target unit cost of the bricks remaining to be installed?

    <p>$1.83/brick</p> Signup and view all the answers

    Which of the following is NOT an objective of project control?

    <p>Increase the project budget</p> Signup and view all the answers

    After 4.3 months, how many man-hours have been spent on the job if 4,700 man-hours have been recorded?

    <p>4,700 mhrs.</p> Signup and view all the answers

    What percent complete is the job if 12,500 sq.ft. is in place out of 40,000 sq.ft.?

    <p>31%</p> Signup and view all the answers

    Which of the following describes the trend in productivity over the course of a job?

    <p>Starts slow, picks up speed, and slows down near the end</p> Signup and view all the answers

    Which approach is used to take corrective action during the job?

    <p>Allocate resources differently</p> Signup and view all the answers

    What is the unit cost of the carpenter man-hours required to complete the formwork job?

    <p>0.25 mhrs./sq.ft.</p> Signup and view all the answers

    What does EAC stand for in project forecasting?

    <p>Estimated Cost at Completion</p> Signup and view all the answers

    What is the formula for calculating Estimated Cost at Completion (EAC)?

    <p>EAC = ACWP + (BAC - BCWP)</p> Signup and view all the answers

    If the Schedule Performance Index (SPI) is calculated as 1.14, what does this indicate about the project's schedule?

    <p>The project is ahead of schedule.</p> Signup and view all the answers

    What is the Cost Performance Index (CPI) if the Cost Variance is -$100 and BCWP is $1,900?

    <p>0.95</p> Signup and view all the answers

    What will be the Estimated Cost at Completion (EAC) given the values: ACWP = $2,000, BAC = $3,200, and BCWP = $1,900?

    <p>$3,300</p> Signup and view all the answers

    What is the primary purpose of cost control in construction projects?

    <p>To maintain expenditure within the authorized estimate while ensuring quality</p> Signup and view all the answers

    How is estimated cost defined in a construction project?

    <p>The initial budget that serves as a benchmark for measuring progress</p> Signup and view all the answers

    What action should a project manager take if the actual cost exceeds the estimated cost?

    <p>Analyze the cause of the cost overruns for corrective action</p> Signup and view all the answers

    What are actual costs in the context of project management?

    <p>The costs that have been incurred during the construction process</p> Signup and view all the answers

    What is the difference between projected cost and target cost?

    <p>Projected cost is an updated estimate based on actuals, while target cost is the desired expenditure</p> Signup and view all the answers

    What might indicate that actual costs are lower than estimated costs?

    <p>Improved worker productivity or inaccurate estimates could be reasons</p> Signup and view all the answers

    Which of the following best defines unit cost?

    <p>The cost associated with a single unit of measure like a brick or worker-hour</p> Signup and view all the answers

    Which of the following is NOT a type of cost in construction projects?

    <p>Indicator cost</p> Signup and view all the answers

    Study Notes

    Project Cost Control

    • Cost control is defined as managing expenditures within the authorized budget, ensuring desired quality, and timely completion.
    • Essential for profitable construction projects.
    • Construction managers need to be aware of and control project costs.
    • Three main types of costs in construction projects: estimated, actual, and projected/target costs.

    Estimated Cost

    • Defines the initial budget for a project.
    • Often presented as either a total direct cost for a job or a unit price based on material quantity.
    • Sets the limit for spending on a project.

    Actual Cost

    • Costs incurred during project execution.
    • Tracking actual costs is crucial for monitoring and controlling potential cost overruns.
    • Regular cost tracking during construction is important.
    • Discrepancies between actual and estimated costs should trigger corrective actions by project managers.

    Projected and Target Cost

    • Updated cost estimate based on actual project progress,
    • Calculated by multiplying the actual unit cost by the number of completed units.
    • Significant deviations between projected and estimated costs demand remedial actions for cost control.
    • A target cost is sometimes set to bring projected costs in line.

    Elements of Project Control

    • Defining project objectives, scope, budget, and schedule are essential steps.
    • Measuring progress (actual progress, time elapsed, money spent) and analyzing project performance with respect to the established baseline are core elements.
    • Implementing corrective actions to keep projects on track is critical to managing costs and timelines

    Objectives of Project Control

    • Generating historical data for future estimations.
    • Establishing benchmarks to compare actual progress against estimated timelines and budgets.
    • Motivating project teams for higher performance and efficiency.
    • Clearly defining responsibilities and credit allocation.
    • Identifying methods for cost reduction.
    • Alerting the relevant management to any potential corrective actions required during the project (not just after).

    Cost and Schedule Analysis

    • Performed at specific points during project execution to track progress relative to the initial estimations.
    • Projects typically begin slowly, accelerate as resources and efficiency improve, and then slow again due to closing activities.
    • Provides a quantitative assessment to ascertain project's progress compared to planned schedule and budget.

    Cost Analysis

    • Evaluating actual project cost relative to the initial estimated cost.
    • Comparing completed units to the total anticipated units to ascertain percentage completion.
    • Analyzing actual spent hours against the hours estimated to evaluate if the project is running over or under budget.

    Schedule Analysis

    • Assessing project progress with respect to the agreed-upon project schedule and timetable.
    • Calculate completed percentage to establish the current completion time status.
    • Calculate the difference between anticipated completion period versus the elapsed time from project start to assess delay patterns

    Cost and Schedule Analysis Example

    • Example case study illustrating how to calculate cost and schedule completion status.
    • Includes calculations for completed area, man-hours spent, and efficiency rates.
    • Clearly defines the approach to identifying whether budgets are being met, and whether schedules are being met.

    Earned Value Analysis

    • Essential for assessing project status comprehensively by merging cost and schedule criteria.

    Earned Value Elements

    • Actual Cost of Work Performed (ACWP) records project expenditures.
    • Budgeted Cost of Work Performed (BCWP) or Earned Value (EV) predicts the budget for completed work.
    • Budgeted Cost of Work Scheduled (BCWS) or Planned Value (PV) is the planned work expenditure.

    Earned Value Calculations

    • Cost Performance Index (CPI) evaluates budget efficiency (CPI > 1: under budget; CPI < 1: over budget).
    • Schedule Performance Index (SPI) measures schedule adherence (SPI > 1: ahead of schedule; SPI < 1: behind schedule).
    • Cost Variance (CV) measures budgetary performance (CV > 0: under budget; CV < 0: over budget).
    • Schedule Variance (SV) measures the adherence to the project schedule(SV > 0: ahead of schedule; SV < 0: behind schedule).

    EVMS Graphical Representation

    • Graphical representation of earned value metrics over time (Cost vs Time).
    • Visual method to observe progress of planned versus actual costs against the project plan schedule/time.

    Project Performance Example

    • A hypothetical project baseline and current status.
    • Analyzing the project's performance and providing progress report.

    Cost & Schedule Analysis (% Complete)

    • Calculating the percentage of the project that has been completed.
    • Assessing the project's financial performance (e.g.,. under/over budget).
    • Evaluating the project's schedule performance (e.g., ahead/behind schedule)

    Forecasting EV

    • Estimating project's final cost(EAC).
    • Formula for EAC: ACWP + (BAC − BCWP).
    • BAC = Budget at Completion.

    Original Budget & Schedule

    • Project schedule with milestones and cost durations.
    • Current progress status.
    • Costs incurred.

    How is the Project Doing?

    • Guidelines for evaluating project performance.
    • Key indicators to evaluate the project (ACWP, BCWS, BCWP, SPI, CV, CPI, EAC)

    Formalize Judgment: $

    • Calculating the cost of each unit.
    • Calculating the total cost of completed units.
    • Project's cost and schedule performance analysis.

    Schedule?

    • Calculating the expected project completion timeline based on the established baseline.
    • Calculating schedule performance index (SPI).
    • Calculating schedule variance (SV).

    Project Performance Results

    • Summary of project status—under budget and ahead of schedule.
    • What is expected final cost?

    Project Performance Results

    Additional Notes

    • The provided information includes examples of calculation methods for various metrics (e.g., costs, schedule, resources, etc.).
    • Practical application to real-world scenarios of the discussed formulas and metrics.

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    Related Documents

    Project Cost Control CEIE370 PDF

    Description

    Test your understanding of cost control in construction projects. This quiz covers key concepts such as estimated, actual, and projected costs, and their significance in managing budgets effectively. Learn how proper cost management ensures profitable project execution.

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