hardMultiple Choice
PK0-005 Practice Question: A project manager is preparing a status report…
A project manager is preparing a status report for stakeholders. The project is currently in the execution phase. Which key performance indicator should be included to show how efficiently the project is using its budget?
⚠ Common exam trap
CompTIA often tests the distinction between CPI (cost efficiency) and SPI (schedule efficiency), and candidates may confuse SPI as a measure of budget performance because both are performance indices.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
CPI
The Cost Performance Index (CPI) is the correct KPI because it directly measures cost efficiency by comparing the earned value (EV) to the actual cost (AC). A CPI greater than 1 indicates the project is under budget, while a CPI less than 1 indicates over budget. This aligns with the question's focus on how efficiently the budget is being used during the execution phase.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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BAC
Why it's wrong here
BAC is the total authorised budget baseline, a static reference figure, so it shows the approved funding envelope rather than efficiency of spend. It is the correct figure when establishing the cost baseline or calculating variances such as CV and CPI.
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EAC
Why it's wrong here
EAC forecasts the total expected cost at completion, a projection of final spend rather than a measure of how efficiently budget is being consumed to date. It suits forecasting whether the project will finish over or under budget.
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SPI
Why it's wrong here
SPI measures schedule performance against planned value, comparing earned value to planned value on the time axis, so it says nothing about budget efficiency. It is the right indicator when reporting whether work is ahead of or behind schedule.
- ✓
CPI
Why this is correct
CPI divides earned value by actual cost, directly expressing budget efficiency as a ratio. A CPI below 1.0 signals cost overrun; above 1.0 signals underspend. It satisfies the stem's requirement to show how efficiently the project is using its budget during execution.
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