CCM Cost Management 3

Question 1

A project's Estimate at Completion (EAC) is calculated as BAC / CPI. If BAC = $800,000 and CPI = 0.90, what is the EAC?

Accepted Answer

$888,889

Answer

EAC = BAC / CPI = $800,000 / 0.90 = $888,889, predicting the project will finish over budget.

Question 2

What is the primary purpose of a cost breakdown structure (CBS) in construction management?

Accepted Answer

To organize and categorize all project costs for control and reporting

Answer

A CBS hierarchically organizes all project costs, enabling systematic tracking, reporting, and control.

Question 3

Which contract type places the greatest cost risk on the owner?

Accepted Answer

Cost-plus with a fixed fee

Answer

In a cost-plus contract, the owner pays all actual project costs plus a fee, bearing the risk that costs may be higher than anticipated.

Question 4

When performing a construction cost estimate, what does 'direct cost' typically include?

Accepted Answer

Labor, materials, equipment, and subcontractor costs directly tied to the work

Answer

Direct costs are expenses directly attributable to field construction activities, including labor, materials, equipment, and subcontractors.

Question 5

A construction manager implements a 'cost-to-complete' forecast each month. What does this metric represent?

Accepted Answer

The estimated remaining cost needed to finish all remaining work

Answer

Cost-to-complete (CTC) is the forecasted cost of all remaining work, used to project final project cost.

(CCM) Certified Construction Manager Practice Test