PRINCE2F PRINCE2 Practices Practice Question
Which TWO statements about tolerances in PRINCE2 are correct?
⚠ Common exam trap
PRINCE2 Foundation often tests the misconception that tolerances are only about time and cost, or that the Project Manager sets project-level tolerances — candidates must remember the six targets and the Board's role in setting project tolerances.
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
✓
Tolerances are defined for each management stage
Option C is correct because PRINCE2 defines tolerances for each management stage, allowing the Project Board to delegate authority to the Project Manager within agreed limits for the stage; these stage tolerances are derived from the overall project tolerances. Option E is correct because when a stage or project tolerance is forecast to be exceeded, the Project Manager must raise an Exception Report to escalate the deviation to the Project Board, which then decides how to proceed (e.g., via an Exception Plan). Option A is wrong because PRINCE2 tolerances cover six aspects: time, cost, scope, quality, risk, and benefits, not just cost and time. Option B is wrong because tolerances are set at both project level and stage level (and can also be set for work packages). Option D is wrong because project-level tolerances are set by the Project Board (not the Project Manager), while the Project Manager may set work-package tolerances within the stage tolerance.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Tolerances are only for cost and time
Why it's wrong here
Tolerances are set for each of the six PRINCE2 performance targets — cost, time, scope, quality, risk and benefits — not cost and time alone. Restricting them to two targets is tempting because cost and time are the most visible constraints, but stage-level scope and quality tolerances are equally valid.
- ✗
Tolerances apply at project level only
Why it's wrong here
Tolerances cascade through the PRINCE2 hierarchy: corporate/programme, project board, stage and team manager levels. Project-level-only contradicts this delegation model. It is tempting because the project board owns the overall project tolerance, but stage and team tolerances are essential for delegated control.
- ✓
Tolerances are defined for each management stage
Why this is correct
Tolerances are set per management stage, giving the Project Manager delegated authority boundaries for each stage. This enables the Project Board to control by exception, reviewing progress only when stage-level thresholds are forecast to be breached.
- ✗
Tolerances are set by the Project Manager
Why it's wrong here
Tolerances are set by the board or a higher-level authority and delegated downward, not defined by the Project Manager, who works within them. It is tempting because the Project Manager monitors and reports against tolerances, but setting them is a governance decision reserved above that role.
- ✓
If a tolerance is forecast to be exceeded, the Project Manager must escalate via an Exception Report
Why this is correct
Stage-level tolerances delegate authority; when a forecast breach exceeds the Project Manager's tolerance, the deviation cannot be resolved within delegated limits, so an Exception Report must be raised to the Project Board for a decision.
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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
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