CCC CCC Cost Estimating & Budgeting

Question 1

Which estimating method derives costs by scaling a known project's cost to a new project using a capacity or size ratio?

Accepted Answer

Factored estimating

Answer

Factored estimating scales a known project's cost to a new one using equipment or capacity ratios, common in process industries.

Question 2

In AACE terminology, a Class 1 estimate is characterized by what level of project definition?

Accepted Answer

65–100%

Answer

A Class 1 estimate requires 65–100% project definition, providing the highest accuracy and lowest expected error range.

Question 3

What is the primary purpose of a cost baseline in project budgeting?

Accepted Answer

To measure and monitor cost performance over time

Answer

The cost baseline serves as the approved time-phased budget against which actual project costs are measured and performance is monitored.

Question 4

Which budget element covers unforeseen work that is within the defined project scope but not yet identified as specific tasks?

Accepted Answer

Contingency reserve

Answer

Contingency reserve addresses known-unknown risks within project scope, while management reserve covers unknown-unknown events.

Question 5

When preparing a conceptual estimate, a cost consultant would most likely rely on which data source?

Accepted Answer

Historical cost databases and capacity ratios

Answer

Conceptual estimates rely on historical databases and parametric ratios because detailed design information is not yet available.

CCC Practice Test