Table of Contents
Which Cost Process Compares Planned vs Actual Spending in PMP?
Learn how the Control Costs process tracks planned versus actual spending using EVM techniques, essential for managing cost performance and avoiding overruns in PMP certification and Waterfall project management.
Question
Which process in Project Cost Management compares planned vs. actual spending to manage cost performance?
A. Control Costs
B. Estimate Costs
C. Determine Budget
Answer
A. Control Costs
Explanation
The Control Costs process in Project Cost Management monitors project cost performance by comparing actual costs against the planned cost baseline using techniques like Earned Value Management (EVM), which calculates metrics such as Cost Variance (CV) and Cost Performance Index (CPI) to identify variances and implement corrective actions. This ongoing monitoring and controlling activity involves updating forecasts, managing approved changes, and preventing cost overruns through variance analysis, reserve usage, and to-complete performance index (TCPI) calculations, ensuring the project remains aligned with the authorized budget. Occurring throughout execution and closure, it distinguishes from Estimate Costs (activity-level cost prediction) and Determine Budget (cost baseline aggregation), enabling proactive decisions in predictive projects.