Question

A project budget report is showing our project as spending $35,000 against a budgeted amount of $40,000. Which of the following is true? A. We are spending less than we should for the project B. We are doing a good job managing the project C. We should check to see if all the bills have been paid D. We have more money to put into budget reserves E. We can't be sure how the project is going

Answer 1

Answer:

E. We can't be sure how the project is going

Explanation:

This numbers alone are not sufficient information to evaluate the project.

We could be spending less because we saved cash in a part of the project, because there are unpaid expenses which are not due yet. There could a series of factor involving this difference. This is only saying the project has available from their original budget 5,000 more dollars. It could spend this without incurring in additional cash spending. Going beyond this will require some kind of approval from the managers.

Resuming: the only conclusion from this, is that the project has available 5,000 dollars to spend if necessary. We cannot know if the project is going well or not.