The correct answer is to ask the project manager to produce an Exception Plan for Stage 3. This is because, under PRINCE2, when a Stage Plan exceeds the agreed cost tolerance, the project board cannot approve it as-is; the deviation triggers the exception management process, requiring the project manager to create an Exception Plan that outlines options to either bring the stage back within tolerance or request a revised tolerance from the board. On the PRINCE2 Foundation exam, this scenario tests your understanding of the boundary between delegated authority and board-level control—a common trap is confusing an Exception Plan with a simple revised Stage Plan, but remember that exceeding tolerance always escalates to an Exception Plan, not a direct approval or rejection. A useful memory tip is "tolerance breach equals Exception Plan," linking the concept of exceeding limits to the formal exception process.
PRINCE2F PRINCE2 Processes Practice Question
This PRINCE2F practice question tests your understanding of prince2 processes. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. 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.
Exhibit
Refer to the exhibit.
Project Board: The project board is reviewing the End Stage Report for Stage 2. The report indicates that the stage has been completed within tolerance, but the next Stage Plan for Stage 3 exceeds the cost tolerance set by the project board. The project board must decide whether to approve the Stage Plan for Stage 3.
Refer to the exhibit. The project board is reviewing the End Stage Report for Stage 2 and the Stage Plan for Stage 3. The Stage Plan for Stage 3 exceeds the agreed cost tolerance. According to PRINCE2, what should the project board do?
Refer to the exhibit.
Project Board: The project board is reviewing the End Stage Report for Stage 2. The report indicates that the stage has been completed within tolerance, but the next Stage Plan for Stage 3 exceeds the cost tolerance set by the project board. The project board must decide whether to approve the Stage Plan for Stage 3.
A
Approve the Stage Plan as it is, since Stage 2 was completed within tolerance
Why wrong: Approving a plan outside tolerance is not allowed.
B
Reject the Stage Plan and ask the project manager to terminate the project
Why wrong: The board should first ask for an Exception Plan.
C
Ask the project manager to produce an Exception Plan for Stage 3
An Exception Plan is the correct response when a stage plan exceeds tolerance.
D
Lower the cost tolerance for Stage 3 to match the plan
Why wrong: Tolerances are set at the start and should not be changed arbitrarily.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Ask the project manager to produce an Exception Plan for Stage 3
According to PRINCE2, when a Stage Plan exceeds the agreed cost tolerance, the project board cannot approve it. Instead, the project manager must produce an Exception Plan that describes the options to bring the stage back within tolerance or to request a revised tolerance. This is a formal exception management process defined in the PRINCE2 manual.
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.
✗
Approve the Stage Plan as it is, since Stage 2 was completed within tolerance
Why it's wrong here
Approving a plan outside tolerance is not allowed.
✗
Reject the Stage Plan and ask the project manager to terminate the project
Why it's wrong here
The board should first ask for an Exception Plan.
✓
Ask the project manager to produce an Exception Plan for Stage 3
Why this is correct
An Exception Plan is the correct response when a stage plan exceeds tolerance.
Related concept
Read the scenario before looking for a memorised answer.
✗
Lower the cost tolerance for Stage 3 to match the plan
Why it's wrong here
Tolerances are set at the start and should not be changed arbitrarily.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often think the project board can simply approve a plan that exceeds tolerance if previous stages were under budget, but PRINCE2 strictly requires an Exception Plan for any stage plan outside tolerance, regardless of prior performance.
Detailed technical explanation
How to think about this question
In PRINCE2, the exception management process is triggered when a stage plan exceeds tolerance. The project manager must produce an Exception Plan that outlines the issue, options, and recommended course of action, which the project board then reviews. This ensures that any deviation from the plan is formally assessed against the business case before proceeding, preventing uncontrolled scope creep or budget overruns.
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 small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
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: Ask the project manager to produce an Exception Plan for Stage 3 — According to PRINCE2, when a Stage Plan exceeds the agreed cost tolerance, the project board cannot approve it. Instead, the project manager must produce an Exception Plan that describes the options to bring the stage back within tolerance or to request a revised tolerance. This is a formal exception management process defined in the PRINCE2 manual.
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.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. When should the Project Manager escalate an issue to the Project Board?
medium
A.When the issue involves the Project Manager's own performance
B.Only at the end of a stage
✓ C.When the issue cannot be resolved within the delegated tolerances
D.Only when the issue is identified
Why C: Issues that threaten tolerances or require changes to baselines should be escalated. The PM manages issues within their authority.
Variation 2. The Project Board has received an Exception Report from the Project Manager. What is the Project Board's next step?
medium
A.Approve the Exception Report
B.Request a new Project Plan
✓ C.Request an Exception Plan to assess options
D.Close the project
Why C: When the Project Board receives an Exception Report, they typically request an Exception Plan to evaluate options. They then decide whether to approve the plan, which may involve changes to the project. A new Project Plan may be part of the Exception Plan, but the immediate step is to request the plan.
Last reviewed: Jun 11, 2026
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