A project budget has estimated cost of $118,000. The current cost-to-complete estimate is $131,000. What is the projected cost overrun?
Correct Answer
C) $13,000.
Projected overrun equals current projected cost minus original budget: $131,000 - $118,000 = $13,000.
Why This Is the Correct Answer
Projected overrun equals current projected cost minus original budget: $131,000 - $118,000 = $13,000.
Why the Other Options Are Wrong
Option A: $118,000.
$118,000. is above the supported result for budget variance; it likely adds an unsupported amount or compares the wrong financial base.
Option B: $249,000.
$249,000. is above the supported result for budget variance; it likely adds an unsupported amount or compares the wrong financial base.
Option D: $6,500.
$6,500. is below the supported result for budget variance; it likely uses the wrong base, period, or account bucket.
Memory Technique
Updating Job-Cost money test: bucket before math for budget variance.
Reference Hint
Study anchor (closed-book): memorize Budget variance from CSLB Law and Business Study Guide; CSLB 2026 Law Book / CSLB Law and Business Study Guide Business Finances; know the rule or calculation trigger without relying on exam-room lookup.
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