PRINCE2F PRINCE2 Processes Practice Question
A project is running a stage where a supplier has failed to deliver an agreed component on time. The Project Manager forecasts that the stage will exceed its cost tolerance. Which action is correct according to PRINCE2?
⚠ Common exam trap
The trap here is believing the Project Manager can resolve a forecast tolerance breach locally through cost recovery or contractual pressure, when any forecast breach of tolerance must be escalated to the Project Board.
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
✓
Raise an Exception Report and escalate the forecast breach to the Project Board.
A forecast breach of a stage cost tolerance removes the deviation from the Project Manager's delegated authority. PRINCE2 requires the Project Manager to produce an Exception Report and escalate it, so the Project Board can decide whether to request an Exception Plan, adjust tolerances or take other direction. Waiting, quietly cutting quality or pushing costs onto the supplier all bypass this control.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Wait until the stage end and report the overspend in the End Stage Report.
Why it's wrong here
Waiting until the stage end would breach the manage by exception principle. Once the Project Manager forecasts a tolerance breach, the Project Board must be informed promptly so it can decide how to proceed. Deferring the issue to the End Stage Report removes the Board's opportunity to redirect the project or authorise an Exception Plan when it can still influence the outcome.
- ✗
Reduce quality inspections on other products to recover the cost variance quietly.
Why it's wrong here
Cutting quality checks to absorb a cost overrun is unacceptable because it undermines the project's quality expectations and could invalidate earlier acceptance decisions. It also conceals a material deviation from the Project Board rather than escalating it. PRINCE2 requires that tolerances are respected and that breaches are escalated, not hidden through unapproved changes to the agreed quality approach.
- ✓
Raise an Exception Report and escalate the forecast breach to the Project Board.
Why this is correct
When a stage or project tolerance is forecast to be exceeded, the Project Manager must raise an Exception Report and escalate it to the Project Board. The Board then considers the options and may request an Exception Plan, change tolerances or stop the project. Escalation is mandatory because the Project Manager's delegated authority does not extend beyond the agreed tolerances.
- ✗
Instruct the Team Manager to absorb the extra cost within the supplier's fixed-price contract.
Why it's wrong here
The Project Manager cannot simply compel a supplier to absorb costs when the delay stems from the supplier's own failure, and doing so does not address the stage-level forecast. Contractual remedies are a separate commercial matter. The immediate PRINCE2 requirement is to escalate the forecast tolerance breach through an Exception Report so the Project Board can direct how the deviation should be handled.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official PeopleCert exam blueprint
This PRINCE2F practice question is part of Courseiva's free PeopleCert certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PRINCE2F exam.