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Control Account

5 minutes 5 Questions

A Control Account (CA) is a management control point in a project where scope, cost, and schedule management converge. It is a consolidated report of multiple subprojects, work packages, and project management processes, helping project managers maintain an organized approach to managing projects. …

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PMP - Control Account Example Questions

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Question 1

You're handling a project with a Control Account (CA) of $1,500,000. The project has reached 60% completion, while the Actual Cost (AC) totals to $900,000 and the Earned Value (EV) is $850,000. As the project manager, what would be the optimal next step?

Correct Answer: Conduct a variance analysis to identify the source of the discrepancy and create essential corrective actions.

The best course of action is to conduct a variance analysis to identify the source of the discrepancy and create essential corrective actions. The project is currently over budget, as the Actual Cost (AC) of $900,000 is higher than the Earned Value (EV) of $850,000 at 60% completion. This indicates a cost variance issue that needs to be addressed. Simply ignoring the situation because the project is within the overall budget fails to proactively manage the cost variance and may lead to further budget overruns. Rushing the remaining project tasks to cope with the Earned Value could compromise quality and lead to additional issues. Increasing the project budget without first analyzing the cause of the variance and exploring corrective actions is premature and may not address the underlying issues. Therefore, conducting a variance analysis to pinpoint the source of the discrepancy and develop targeted corrective actions is the most appropriate next step for the project manager to keep the project on track and within budget.

Question 2

A large aerospace project has a control account of $5 million for developing a new satellite component. At the 40% completion mark, the Earned Value (EV) is $1.8 million, while the Actual Cost (AC) has reached $2.2 million. The Schedule Performance Index (SPI) is 0.9, indicating a slight delay. The project team has identified potential design improvements that could enhance the component's performance but would require additional resources. As the project manager, what is the most appropriate course of action?

Correct Answer: Conduct a thorough analysis of the cost and schedule variances, evaluate the impact of the proposed design improvements, and present options to the stakeholders for decision-making.

The best course of action is to conduct a thorough analysis of the cost and schedule variances, evaluate the impact of the proposed design improvements, and present options to the stakeholders for decision-making.

This approach is most appropriate because:

1. It acknowledges the current project status (cost overrun and schedule delay).
2. It considers the potential design improvements.
3. It involves stakeholders in the decision-making process.
4. It aligns with proper project management practices of analysis before action.

The other options are less suitable:

Implementing design improvements immediately would be premature and could exacerbate the existing cost and schedule issues.

Focusing solely on accelerating the schedule fails to address the cost variance and design improvement opportunities comprehensively.

Performing a root cause analysis of the cost overrun and implementing strict cost control measures, while important, does not adequately address the schedule delay or potential design improvements.

The chosen approach allows for a balanced consideration of all factors (cost, schedule, and potential improvements) and ensures informed decision-making with stakeholder involvement.

Question 3

You have a control account budget at completion of $80,000. The project has progressed 30%, and you spent $28,000. How should you proceed?

Correct Answer: Monitor the project's performance and adjust if needed.

At the current rate of the project's progression and expenditure, it does not appear that the project will exceed its budget. If 30% of the project cost $28,000, the extrapolated cost of the complete project would be approximately $93,333. While this amount is more than the budget, it is not yet an amount that can't be adjusted or controlled. So the best option at this point would be to 'Monitor the project's performance and adjust if needed.' There is no immediate need to restructure the project or request a budget increase, both of which would be more disruptive steps to take. Definitely, there is no need to terminate the project as we have not yet discovered an issue severe enough to warrant such drastic action.

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