This PMP practice question tests your understanding of process — managing technical aspects. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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 team member reports that a task is 50% complete but has consumed 70% of the budget. Which metric indicates that the project is over budget?
Budget at Completion (BAC)
Why wrong: BAC is the total budget, not a performance metric.
Cost Performance Index (CPI)
CPI < 1 indicates cost overrun.
Estimate at Completion (EAC)
Why wrong: EAC is a forecast, not an indicator of current performance.
Schedule Performance Index (SPI)
Why wrong: SPI measures schedule efficiency, not cost.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Cost Performance Index (CPI)
The Cost Performance Index (CPI) is the metric that directly compares the value of work performed (Earned Value) to the actual cost incurred. A CPI less than 1.0 indicates that the project is over budget, as it costs more than planned to achieve the work completed. In this scenario, with 50% of the work done but 70% of the budget spent, the CPI would be 0.5/0.7 ≈ 0.71, confirming a cost overrun.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Budget at Completion (BAC)
Why it's wrong here
BAC is the total budget, not a performance metric.
Cost Performance Index (CPI)
Why this is correct
CPI < 1 indicates cost overrun.
Related concept
Read the scenario before looking for a memorised answer.
Estimate at Completion (EAC)
Why it's wrong here
EAC is a forecast, not an indicator of current performance.
Schedule Performance Index (SPI)
Why it's wrong here
SPI measures schedule efficiency, not cost.
Common exam traps
The trap here is confusing CPI with SPI, as both are performance indices, but SPI measures schedule efficiency (EV/PV) and does not indicate budget health, leading candidates to mistakenly select SPI when the question asks about being over budget.
Detailed technical explanation
CPI is calculated as Earned Value (EV) divided by Actual Cost (AC). In this case, EV is 50% of the planned value (e.g., $50,000 if BAC is $100,000), and AC is $70,000, yielding CPI = 0.714. A CPI below 1.0 is a definitive signal of cost overrun, and it is used in Earned Value Management (EVM) to forecast EAC (e.g., EAC = BAC / CPI). Real-world project managers use CPI trends to trigger corrective actions before the overrun worsens.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A practitioner preparing for the PMP 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
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FAQ
Process — Managing Technical Aspects — This question tests Process — Managing Technical Aspects — Read the scenario before looking for a memorised answer..
The correct answer is: Cost Performance Index (CPI) — The Cost Performance Index (CPI) is the metric that directly compares the value of work performed (Earned Value) to the actual cost incurred. A CPI less than 1.0 indicates that the project is over budget, as it costs more than planned to achieve the work completed. In this scenario, with 50% of the work done but 70% of the budget spent, the CPI would be 0.5/0.7 ≈ 0.71, confirming a cost overrun.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
This PMP practice question is part of Courseiva's free PMI certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the PMP exam.
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