CCM Cost and Time Management 3 — Questions and Answers
Question 1: Which type of cost is directly attributable to a specific construction project and varies with the volume of work?
- Overhead cost
- Indirect cost
- Direct cost (Correct answer)
- Fixed cost
Correct answer: Direct cost
Direct costs are expenses that can be traced directly to a project, such as labor, materials, and equipment used on site.
Question 2: A construction manager identifies a critical path activity with 10 days of free float. What does this mean?
- The activity can be delayed 10 days without delaying the project
- The activity can be delayed 10 days without delaying any successor activity's early start (Correct answer)
- The activity has 10 days of total slack
- The activity is on the critical path and cannot be delayed
Correct answer: The activity can be delayed 10 days without delaying any successor activity's early start
Free float is the amount of time an activity can be delayed without affecting the early start of any immediate successor.
Question 3: Which contract type places the greatest financial risk on the owner?
- Lump-sum contract
- Cost-plus-fixed-fee contract (Correct answer)
- Unit price contract
- Guaranteed maximum price contract
Correct answer: Cost-plus-fixed-fee contract
Cost-plus contracts reimburse all allowable costs plus a fee, giving the owner maximum cost risk since there is no price ceiling without a GMP clause.
Question 4: What is the formula for calculating the Variance at Completion (VAC)?
- BAC - EAC (Correct answer)
- EV - AC
- PV - EV
- BAC - AC
Correct answer: BAC - EAC
VAC = BAC - EAC, representing the expected budget surplus or deficit at project completion.
Question 5: A construction schedule shows lag on a Finish-to-Start relationship. What does this represent?
- Successor must start before predecessor finishes
- A required waiting period between the predecessor finishing and successor starting (Correct answer)
- The predecessor and successor overlap
- Both activities must finish at the same time
Correct answer: A required waiting period between the predecessor finishing and successor starting
Lag in a Finish-to-Start relationship means the successor cannot start until a specified time after the predecessor finishes.
Question 6: Which method of schedule compression reduces project duration by adding resources to critical path activities?
- Fast-tracking
- Crashing (Correct answer)
- Resource leveling
- Schedule compression
Correct answer: Crashing
Crashing adds resources (overtime, additional crews) to critical path activities to reduce their duration, typically increasing cost.
Question 7: In construction cost management, what is a contingency reserve used for?
- Management-identified risks outside the project scope
- Known unknowns — identified risks that may or may not occur (Correct answer)
- General overhead and profit margin
- Unforeseeable scope additions
Correct answer: Known unknowns — identified risks that may or may not occur
Contingency reserves address known unknowns — identified risks included in the project's risk register that may require additional funds.
CCM Cost and Time Management 3
Which type of cost is directly attributable to a specific construction project and varies with the volume of work?