The answer is to include the cost variance and updated forecast in the End Stage Report and submit it. This is correct because the End Stage Report is the formal PRINCE2 mechanism for reporting stage performance to the Project Board, including any deviations from the planned budget. Since the $20,000 overrun falls within the stage’s tolerance (as no exception report is triggered), the project manager must transparently report the actual cost of $520,000 against the planned $500,000, along with a revised forecast, enabling the board to make an informed decision. On the PRINCE2 Foundation exam, this question tests your understanding of management by exception and the distinct roles of the End Stage Report versus the Exception Report. A common trap is assuming any cost variance requires an Exception Report, but the key is tolerance: variances within tolerance are reported in the End Stage Report, while those exceeding tolerance trigger an Exception Report. Remember the memory tip: “Within tolerance, End Stage Report; beyond tolerance, Exception Report.”
PRINCE2F PRINCE2 Processes Practice Question
This PRINCE2F practice question tests your understanding of prince2 processes. Compare every option against the stated constraints before choosing — the best answer satisfies all requirements, not just the most obvious one. 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 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?
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.
Option C is correct because 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.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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
The project board should be informed via the End Stage Report first.
✗
Ignore the overrun because it is within the tolerance set by the project board.
Why it's wrong here
The overrun of $20,000 may exceed tolerance; the report must reflect actuals.
✓
Include the cost variance and updated forecast in the End Stage Report and submit it.
Why this is correct
The report should highlight variances and forecasts for the next stage.
Related concept
Read the scenario before looking for a memorised answer.
✗
Raise an exception report to the project board immediately.
Why it's wrong here
An exception report is used when tolerances are forecast to be exceeded; but the stage is ending, so the End Stage Report is appropriate.
Common exam traps
Common exam trap: answer the scenario, not the keyword
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.
Detailed technical explanation
How to think about this question
In PRINCE2, stage tolerances are set by the Project Board and define the permissible deviation for cost, time, scope, risk, and quality. The End Stage Report compares actuals against the stage plan, and if the variance is within tolerance, the report is submitted; if the forecast exceeds tolerance, an exception report is triggered. A common subtlety is that the tolerance applies to the forecast at completion, not just the current actuals—so a $20,000 overrun might be within a 10% tolerance ($50,000), but if the forecast shows a trend exceeding that, an exception report is required.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
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
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
PRINCE2 Processes — This question tests PRINCE2 Processes — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Include the cost variance and updated forecast in the End Stage Report and submit it. — Option C is correct because 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.
What should I do if I get this PRINCE2F question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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