Cost Management Flashcards
7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Cost Management flashcards as text
A construction manager conducts a 'constructability review' during design. What is the primary cost management benefit?
Answer: It identifies construction issues early when changes are least expensive to make
Constructability reviews during design catch potential construction problems early, when design changes cost far less than field changes.
What does 'bid shopping' refer to in construction procurement, and why is it considered unethical?
Answer: Revealing a subcontractor's bid to competitors to drive down prices after award
Bid shopping undermines fair competition by using one subcontractor's price to pressure others, damaging trust and often reducing quality.
On a large construction project, what is the purpose of a 'project control budget' separate from the contract value?
Answer: It is an internal working budget including cost targets and contingencies used to manage costs proactively
The project control budget is the internal management tool that sets cost targets for each work package, enabling proactive cost control.
Which earned value metric best indicates whether a project will finish on time?
Answer: Schedule Performance Index (SPI)
SPI = EV / PV measures schedule efficiency; an SPI below 1.0 indicates the project is behind its planned schedule.
A construction manager must allocate shared equipment costs across multiple project work packages. Which method is most appropriate?
Answer: Use an equitable allocation basis such as hours used or area served by each work package
An equitable allocation basis (such as usage hours) ensures shared equipment costs are fairly distributed across work packages benefiting from the equipment.
What is a 'should-cost' estimate in construction project management?
Answer: An independent estimate of what a project should reasonably cost, used to evaluate contractor bids
A should-cost estimate is an independent owner's estimate used to benchmark and evaluate contractor or subcontractor bid prices.
During project closeout, what is the significance of a 'final cost reconciliation' in construction management?
Answer: It compares final actual costs to the approved budget and documents variances for lessons learned
Final cost reconciliation closes the financial accounts, documents budget-to-actual variances, and captures lessons learned for future projects.