PMP Process — Managing Technical Aspects Practice Question
A project using a predictive approach is 40% complete. The earned value (EV) is $200,000, the planned value (PV) is $250,000, and the actual cost (AC) is $230,000. What should the project manager do NEXT?
⚠ Common exam trap
PMP often tests the analyze-before-act principle: candidates jump to escalation, rebaselining, or compression techniques instead of first performing variance analysis to understand root causes.
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
✓
Analyze the variances to determine root causes and implement corrective actions
The PMP mindset requires the project manager to first analyze variances before taking action or escalating. With EV=$200,000, PV=$250,000, and AC=$230,000, the project is behind schedule (SV=-$50,000) and over budget (CV=-$30,000). The correct next step is to perform variance analysis to identify root causes and then implement corrective actions, which is exactly what option B describes.
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 variances to stakeholders immediately and ask for more budget
Why it's wrong here
Reporting variances and immediately requesting more budget without prior analysis is premature and unprofessional. A project manager must first understand the root causes of the variances and evaluate potential solutions before presenting issues or proposed changes to stakeholders. Such an approach demonstrates a lack of due diligence and could erode stakeholder confidence, as it suggests a reactive rather than a proactive management style.
- ✓
Analyze the variances to determine root causes and implement corrective actions
Why this is correct
The correct first step is to analyze the variances thoroughly to identify their underlying root causes. This systematic investigation allows the project manager to understand precisely why performance deviated from the plan, enabling the development of effective and targeted corrective actions. Implementing well-considered corrective actions is essential for bringing the project back on track or mitigating future deviations, aligning with proactive project management principles.
- ✗
Calculate the estimate at completion (EAC) and rebaseline the project
Why it's wrong here
Calculating the Estimate at Completion (EAC) is a forecasting activity, and while useful for predicting future performance, it is not the immediate corrective action. Rebaselining the project, which involves formally updating the performance measurement baseline, is a significant undertaking that should only be considered as a last resort after all viable corrective actions have been explored and failed, and it requires formal approval through the Integrated Change Control process.
- ✗
Apply schedule compression techniques such as crashing
Why it's wrong here
Applying specific schedule compression techniques like crashing without first analyzing the variance root causes is a reactive and potentially inefficient approach. Crashing, which involves adding resources to shorten duration, often increases costs and risks, and may not address the fundamental problem if the root cause is, for example, poor estimation or scope creep. A thorough analysis ensures that the chosen intervention is appropriate and effective for the specific variance.
Go deeper
Related to this question
Learn chapter
Budgeting and Cost Management
Key term
Project Management Plan
A formal, approved document that defines how a project is executed, monitored, controlled, and closed, serving as the single source of truth for the project team.
Key term
Training and Development
Training and Development is the process of enhancing team members' skills, knowledge, and competencies to improve project performance and achieve career growth.
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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 PMI exam blueprint
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