PRINCE2F PRINCE2 Practices Practice Question
The Project Board has set a cost tolerance of +/- 10% for a stage. The Project Manager forecasts that the stage will be completed 15% under budget. What should the Project Manager do?
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 to the Project Board
The cost tolerance for the stage is +/-10%, meaning the stage must be completed within 10% over or under the planned budget. A forecast of 15% under budget exceeds the -10% tolerance, constituting an exception. According to PRINCE2, when a forecast indicates that stage tolerance will be exceeded, the Project Manager must raise an Exception Report to the Project Board. Option A is incorrect because Highlight Reports are used for regular reporting within tolerance, not for exceptions. Option B is incorrect because the Project Manager cannot reallocate surplus without authorization. Option C is incorrect because being outside tolerance requires escalation, not inaction.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Report the underrun in the next Highlight Report
Why it's wrong here
Exceptions must be reported immediately via an Exception Report, not a Highlight Report.
- ✗
Reallocate the surplus to other activities without informing the Project Board
Why it's wrong here
The Project Board must approve any changes to stage tolerances.
- ✗
Continue as planned since being under budget is beneficial
Why it's wrong here
Under budget by more than tolerance is still an exception and must be escalated.
- ✓
Raise an Exception Report to the Project Board
Why this is correct
When a tolerance is forecast to be exceeded (even beneficial), an Exception Report is required.
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