CCE Materials & Resource Management 5

Question 1

Owning a loader costs $60,000/yr fixed plus $40/hr to operate. Renting it costs $100/hr including operation. At how many hours per year do the two options cost the same?

Accepted Answer

1,000 hours

Answer

60,000 ÷ (100 − 40) = 1,000 hours; above that, owning is cheaper.

Question 2

Under an 80% learning curve, the first unit takes 100 labor hours. How long does the 4th unit take?

Accepted Answer

64 hours

Answer

Each doubling of units multiplies unit time by 0.80: unit 2 = 80, unit 4 = 64 hours.

Question 3

Materials currently cost $500,000. With 4% annual escalation compounded, what is the expected cost if bought 2 years from now?

Accepted Answer

$540,800

Answer

500,000 × 1.04² = 500,000 × 1.0816 = $540,800.

Question 4

Annual material usage is $1,200,000 and average inventory is $300,000. What is the inventory turnover ratio?

Accepted Answer

4

Answer

Turnover = annual usage ÷ average inventory = 1,200,000 ÷ 300,000 = 4.

Question 5

On owner-furnished (free-issue) materials, the contractor usually remains responsible for:

Accepted Answer

Receiving, storing, protecting, and installing the materials

Answer

The owner buys the materials, but the contractor normally takes care, custody, and control once they are delivered.

CCE - Certified Cost Engineer Practice Test

CCE - Certified Cost Engineer Practice Test

CCE Materials & Resource Management 5