Financial Management

Correct Answer: Perform a variance analysis to understand the cause of the overrun and adjust future estimates accordingly.

The best course of action when costs are exceeding the estimates during project execution is to 'Perform a variance analysis to understand the cause of the overrun and adjust future estimates accordingly'. Variance Analysis is a standard tool in project management used to identify the cause of the variance from the planned performance and the actual performance. It helps in effective decision making and taking corrective measures if needed. The other options are not advisable because: - Ignoring the overrun problem may lead to project failure as it could increase further without understanding and addressing the root cause - Stopping project execution until further funds are obtained from stakeholders is not always the ideal solution. It could halt the progress and also stakeholders might not agree to provide additional funds without seeing the reasons of overrun - Re-allocating resources from less important parts of the project might affect those less important parts and overall project performance without ensuring that the overruns wouldn't happen in future.

Correct Answer: Usage-based cost allocation

Usage-based cost allocation is the most appropriate method to fairly allocate shared service costs among customers. It ensures that customers are paying for the actual resources they consume, unlike other methods such as random, equal, or percentage-based cost allocation which can lead to unfair distribution of costs.

Correct Answer: Service-based costing

Service-based costing helps in understanding the financial value of providing IT services by estimating the cost of each service individually. This gives more accurate data on the financial value of providing these services, as opposed to other costing methods that focus on different aspects of the business.