Free PMP Cost Management Practice Test 2026 — Project Management Professional Questions

This free PMP Cost Management practice test covers PMI Knowledge Area 4 — cost management, including cost estimation, Earned Value Management (EVM), and cost performance metrics. Each question includes a detailed explanation grounded in the PMBOK Guide and PMP Examination Content Outline.

Key Topics in PMP Cost Management

6 Free PMP Cost Management Practice Questions with Answers

Sample Question 1 — Project Cost Management

You are managing a construction project. Midway through, unforeseen ground instability requires additional excavation and reinforcement, increasing costs by 15%. The original budget was approved six months ago. What's the BEST course of action?

  1. A. Proceed with the changes, absorbing the cost overrun within the existing budget.
  2. B. Immediately halt the project until a revised budget is approved.
  3. C. Submit a change request detailing the reasons, cost impact, and proposed solutions for approval. (Correct answer)
  4. D. Inform stakeholders informally of the cost increase and proceed with the necessary work.

Correct answer: C

Explanation: Following the formal change management process is crucial. Option C ensures transparency, proper documentation, and stakeholder agreement before proceeding with cost adjustments. Options A and D are risky and could lead to project failure. Option B is overly drastic and inefficient.

Sample Question 2 — Project Cost Management

Your project is using earned value management (EVM). The planned value (PV) is $100,000, the earned value (EV) is $80,000, and the actual cost (AC) is $90,000. What is the cost performance index (CPI), and what does it indicate?

  1. A. CPI = 1.125; Cost overruns.
  2. B. CPI = 0.89; Cost under-runs.
  3. C. CPI = 1.125; Cost under-runs.
  4. D. CPI = 0.89; Cost overruns. (Correct answer)

Correct answer: D

Explanation: CPI = EV/AC = $80,000/$90,000 = 0.89. A CPI less than 1 indicates cost overruns; the project is spending more than planned to achieve the earned value.

Sample Question 3 — Project Cost Management

A project's budget is $500,000. After 50% completion, the actual cost is $300,000. What is the estimate at completion (EAC) using the current cost performance index (CPI) method?

  1. A. $500,000
  2. B. $600,000 (Correct answer)
  3. C. $400,000
  4. D. $300,000

Correct answer: B

Explanation: CPI = EV/AC = (0.5 * $500,000) / $300,000 = 0.83. EAC = BAC/CPI = $500,000 / 0.83 ≈ $600,000. This indicates a projected cost overrun.

Sample Question 4 — Project Cost Management

You're managing a software development project. During the testing phase, a major bug is discovered, requiring significant rework and delaying the project. How should you handle the associated cost increase?

  1. A. Absorb the cost increase to avoid delays.
  2. B. Reduce the scope of the project to compensate for the cost increase.
  3. C. Request a budget increase through a formal change request process. (Correct answer)
  4. D. Inform stakeholders informally about the cost increase and hope for the best.

Correct answer: C

Explanation: The formal change request process ensures proper documentation, stakeholder approval, and transparent cost management. Options A, B, and D are less effective and could lead to project issues.

Sample Question 5 — Project Cost Management

Which of the following is NOT a key input to cost budgeting?

  1. A. Project scope statement
  2. B. Risk register
  3. C. Resource calendar (Correct answer)
  4. D. Project schedule

Correct answer: C

Explanation: In the Determine Budget process, you aggregate already-estimated costs to establish a formal cost baseline. While the Resource calendar is vital for the earlier step of estimating individual costs, it is not a direct input for the budgeting phase. Conversely, the Project scope statement defines the work boundaries, the Risk register allows for the calculation of contingency reserves, and the Project schedule is necessary to create the time-phased cost baseline (the S-curve).

Sample Question 6 — Project Cost Management

Your project is experiencing significant cost overruns. Which of the following is the LEAST effective way to address this?

  1. A. Analyze the cost variance and schedule variance to identify the root cause.
  2. B. Implement corrective actions to bring the project back on track.
  3. C. Ignore the problem, hoping it resolves itself. (Correct answer)
  4. D. Engage stakeholders to explore options such as scope reduction or schedule extensions.

Correct answer: C

Explanation: Ignoring the problem will only exacerbate the issue. Proactive analysis, corrective actions, and stakeholder engagement are crucial for effective cost management.

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