CCM Cost Management 4

Question 1

A construction project experiences frequent scope creep. Which cost control tool is most effective for managing approved changes to the budget?

Accepted Answer

A formal change management system with updated cost baseline

Answer

A formal change management system ensures all scope changes are evaluated, approved, and reflected in an updated cost baseline.

Question 2

Which of the following is an example of an indirect construction cost?

Accepted Answer

Project trailer and temporary facilities

Answer

Indirect costs like temporary facilities support the overall project but cannot be attributed to a single specific work item.

Question 3

A project manager receives a cost variance (CV) of -$50,000. What does this indicate?

Accepted Answer

The project is $50,000 over budget

Answer

A negative cost variance (CV = EV - AC) means actual costs exceed earned value, indicating the project is over budget.

Question 4

What is the purpose of a 'cash flow forecast' on a construction project?

Accepted Answer

To project when money will be spent and received to ensure liquidity

Answer

A cash flow forecast predicts the timing of expenditures and revenues, helping to identify potential funding gaps and plan financing.

Question 5

Under which circumstances would a construction manager recommend 'fast-tracking' a project, and what cost implication does it carry?

Accepted Answer

When schedule is compressed; it often increases costs due to parallel work and rework risk

Answer

Fast-tracking overlaps sequential phases to compress schedule but typically increases costs due to coordination complexity and potential rework.

(CCM) Certified Construction Manager Practice Test