This PMP practice question tests your understanding of people — leading projects. 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.
Your project is running 15% over budget at the midpoint. Upon review, you find that the cost overrun is due to an underestimation of hardware costs. The sponsor is concerned and asks for a plan to get back on track. What should you do first?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "first"
Why it matters: Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Analyze the cost variance, determine the corrective actions, and submit a change request if necessary
Option B is correct because the first step in addressing a cost overrun is to analyze the variance to understand its root cause and impact, then determine corrective actions. The PMBOK Guide emphasizes that before any change request, you must perform a root cause analysis and evaluate options within the existing budget. Requesting additional funds (A) or using management reserve (D) without analysis violates the principle of first exhausting all other options and maintaining transparency.
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.
✗
Request additional funds from the sponsor without further analysis
Why it's wrong here
The PM should first analyze the situation and present options, not just ask for more money.
✓
Analyze the cost variance, determine the corrective actions, and submit a change request if necessary
Why this is correct
Following the control cost process, the PM presents options after analysis.
Clue confirmation
The clue word "first" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
Ask the team to reduce scope to cut costs immediately
Why it's wrong here
Reducing scope without formal approval bypasses change control and may impact project objectives.
✗
Use the management reserve without notifying the sponsor
Why it's wrong here
Management reserve use typically requires approval and should be communicated.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often jump to requesting additional funds or using management reserve without first performing the required analysis, confusing a symptom (cost overrun) with a solution, and ignoring the PMBOK's emphasis on root cause analysis before any corrective action.
Trap categories for this question
Scenario analysis trap
The PM should first analyze the situation and present options, not just ask for more money.
Detailed technical explanation
How to think about this question
In earned value management (EVM), the cost variance (CV = EV - AC) and cost performance index (CPI = EV/AC) quantify the overrun. A CPI of 0.85 indicates a 15% cost overrun, meaning for every dollar spent, only $0.85 of work is earned. Corrective actions might include re-estimating hardware costs, negotiating with vendors, or optimizing other cost categories, all of which must be documented in a change request if they affect the cost baseline. The management reserve is for unknown-unknowns, not for known underestimations, which should be handled through a change request to the cost baseline.
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 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.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this PMP question in full detail.
People — Leading Projects — This question tests People — Leading Projects — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Analyze the cost variance, determine the corrective actions, and submit a change request if necessary — Option B is correct because the first step in addressing a cost overrun is to analyze the variance to understand its root cause and impact, then determine corrective actions. The PMBOK Guide emphasizes that before any change request, you must perform a root cause analysis and evaluate options within the existing budget. Requesting additional funds (A) or using management reserve (D) without analysis violates the principle of first exhausting all other options and maintaining transparency.
What should I do if I get this PMP question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Are there clue words in this question I should notice?
Yes — watch for: "first". Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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