Cost Management
10% of the examCost Management is 10% of the exam and the most formula-driven domain after scheduling. Earned Value Management appears constantly: given BAC, EV, PV, and AC, you compute variances and indices and interpret them. The arithmetic is simple — the exam tests whether you know which formula answers which question and what the sign convention means.
Beyond EVM, this domain covers how estimates mature with design (Order of Magnitude ±30% down to Construction Documents ±5%), the difference between budgets, estimates, and cost control, value engineering as a function-based discipline rather than scope-cutting, life-cycle costing, and reserve management — construction contingency for known unknowns versus management reserve for unknown unknowns.
A reliable pattern: negative variances are bad, indices below 1.0 are bad. If you can compute CPI and then chain it into EAC without hesitating, you have most of this domain banked.
Key concepts
- EVM: CV = EV−AC, SV = EV−PV, CPI = EV÷AC, SPI = EV÷PV
- Forecasting: EAC = BAC÷CPI, ETC = EAC−AC, VAC = BAC−EAC, TCPI = (BAC−EV)÷(BAC−AC)
- Estimate classes: ±30% → ±20% → ±10% → ±5% as design matures
- Value engineering: organized view, function-oriented approach, creative thinking
- Life-cycle costing: total cost of ownership
- Contingency (known unknowns) vs. management reserve (unknown unknowns)
Exam tips
- Memorize the formula table cold — these are free points
- TCPI above 1.0 means future work must beat past efficiency to hit budget
- Unit price contracts fit known work with uncertain quantities; quantity risk stays with the owner
51 practice questions in this domain
5 are in the free practice test; the rest unlock with premium.