This PRINCE2F practice question tests your understanding of prince2 processes. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A project is forecast to exceed its stage cost tolerance. What is the Project Manager's first action?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "first"
Why it matters: Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
Raise an Exception Report to the Project Board
The PM must escalate immediately.
Continue the stage and report the overrun in the End Stage Report
Why wrong: Waiting until the end violates management by exception.
Request a change to the project budget from the Senior User
Why wrong: Only the Project Board can authorise tolerance changes.
Proceed with the next stage early to save time
Why wrong: This does not address the cost overrun.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Raise an Exception Report to the Project Board
According to PRINCE2, when a project manager forecasts that stage costs will exceed the agreed stage tolerance, the first action is to raise an Exception Report to the Project Board. This is because the project manager must escalate the deviation immediately, as they do not have authority to exceed tolerance without board approval. The Exception Report informs the board of the situation and options, allowing them to decide on corrective action.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Raise an Exception Report to the Project Board
Why this is correct
The PM must escalate immediately.
Clue confirmation
The clue word "first" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
Continue the stage and report the overrun in the End Stage Report
Why it's wrong here
Waiting until the end violates management by exception.
Request a change to the project budget from the Senior User
Why it's wrong here
Only the Project Board can authorise tolerance changes.
Proceed with the next stage early to save time
Why it's wrong here
This does not address the cost overrun.
Common exam traps
The trap here is that candidates often think they can 'fix' the overrun internally or report it later, but PRINCE2 mandates immediate escalation via an Exception Report when tolerance is forecast to be exceeded.
Detailed technical explanation
In PRINCE2, stage tolerances are set by the project board, and the project manager must manage within these tolerances. The Exception Report is a formal mechanism that triggers an Exception Plan, which the board reviews to decide whether to approve revised tolerances, change scope, or stop the project. This ensures that the project board retains control over significant deviations, preventing unauthorized budget overruns and maintaining alignment with the business case.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A practitioner preparing for the PRINCE2F exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
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FAQ
PRINCE2 Processes — This question tests PRINCE2 Processes — Read the scenario before looking for a memorised answer..
The correct answer is: Raise an Exception Report to the Project Board — According to PRINCE2, when a project manager forecasts that stage costs will exceed the agreed stage tolerance, the first action is to raise an Exception Report to the Project Board. This is because the project manager must escalate the deviation immediately, as they do not have authority to exceed tolerance without board approval. The Exception Report informs the board of the situation and options, allowing them to decide on corrective action.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Yes — watch for: "first". Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 24, 2026
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