Question

A third method for determining the forecasted cost at completion is to re-estimate the costs for all the remaining work to be performed and then add this re-estimate to the cumulative actual cost. If the amount of cumulated actual costs is less than difference between the total budgeted cost and the re-estimate, then
A. the FCAC is less than the TBC.
B. the FCAC is greater than the TBC.
C. the FCAC cannot be calculated with the values given.
D. additional information is needed to predict the FCAC.

Answer 1

Answer:

A. the FCAC is less than the TBC

Explanation:

If the amount of cumulated actual costs is less than difference between the total budgeted cost and the re-estimate, then the FCAC is less than the TBC