PRINCE2F PRINCE2 Processes Practice Question
A project manager is preparing the End Stage Report for the second stage. The project's planned budget for the stage is $500,000, but actual costs are $520,000. The project board is concerned about cost overrun. What is the most appropriate action for the project manager?
⚠ Common exam trap
PeopleCert often tests the distinction between reporting variances within tolerance (End Stage Report) versus exceeding tolerance (Exception Report), and the trap here is assuming any cost overrun automatically triggers an exception report, ignoring the role of tolerance thresholds.
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
✓
Include the cost variance and updated forecast in the End Stage Report and submit it.
The End Stage Report is the formal mechanism to report stage performance, including cost variances, to the Project Board. The project manager must include the actual cost ($520,000) against the planned budget ($500,000) and provide an updated forecast, allowing the board to make an informed decision. This aligns with PRINCE2's management by exception principle, where variances within tolerance are reported in the End Stage Report, not via an exception report.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Request immediate additional budget from the project board before submitting the report.
Why it's wrong here
Requesting additional budget pre-empts the project board's tolerance decision; the project manager must first compare the $20,000 variance against the stage cost tolerance and report it through the End Stage Report, since only the board can authorise additional funding once an exception is formally declared.
- ✗
Ignore the overrun because it is within the tolerance set by the project board.
Why it's wrong here
Tolerances are agreed limits within which the project manager may proceed without escalation, but the overrun must still be documented and explained in the End Stage Report; ignoring it removes the board's visibility and prevents them from judging whether the stage remains viable.
- ✓
Include the cost variance and updated forecast in the End Stage Report and submit it.
Why this is correct
The End Stage Report must present actual versus planned costs, so recording the $20,000 overspend and the revised forecast gives the project board the evidence needed to decide on corrective action. Concealing or omitting the variance would breach tolerance reporting.
- ✗
Raise an exception report to the project board immediately.
Why it's wrong here
An exception report is raised only when a stage or project is forecast to exceed the tolerances delegated by the project board; a $20,000 overspend must first be assessed against the agreed cost tolerance, and if it falls within it, the End Stage Report itself is the correct vehicle for highlighting the variance.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.