CCM Cost Management 2

Question 1

A project has a Budget at Completion (BAC) of $500,000, an Earned Value (EV) of $200,000, and Actual Cost (AC) of $250,000. What is the Cost Performance Index (CPI)?

Accepted Answer

0.80

Answer

CPI = EV / AC = $200,000 / $250,000 = 0.80, indicating the project is over budget.

Question 2

Which cost estimating technique uses historical data from similar past projects to develop a high-level estimate for a new project?

Accepted Answer

Analogous estimating

Answer

Analogous estimating leverages historical data from comparable projects to produce a quick, high-level cost estimate.

Question 3

What does the term 'contingency reserve' refer to in construction cost management?

Accepted Answer

Funds allocated to cover identified risks with known probabilities

Answer

Contingency reserves address identified risks (known unknowns) and are included within the project cost baseline.

Question 4

In a Guaranteed Maximum Price (GMP) contract, who bears the risk if actual construction costs exceed the GMP?

Accepted Answer

The contractor

Answer

Under a GMP contract, the contractor absorbs costs above the guaranteed maximum price, protecting the owner from cost overruns.

Question 5

A construction manager uses a cost-loaded schedule to track project finances. What is the primary benefit of this approach?

Accepted Answer

It allows earned value analysis by linking costs directly to schedule activities

Answer

A cost-loaded schedule integrates cost and schedule data, enabling earned value management (EVM) to measure performance.

(CCM) Certified Construction Manager Practice Test

(CCM) Certified Construction Manager Practice Test

CCM Cost Management 2