CCT Cost Estimation & Budgeting 2

Question 1

Which estimating technique uses a mathematical relationship between a physical or functional characteristic and cost?

Accepted Answer

Parametric estimating

Answer

Parametric estimating uses statistical relationships between historical data and project parameters to calculate cost.

Question 2

A project has a BAC of $500,000, EV of $200,000, and AC of $250,000. What is the Estimate at Completion (EAC) assuming future work is performed at the budgeted rate?

Accepted Answer

$550,000

Answer

EAC = AC + (BAC - EV) = $250,000 + ($500,000 - $200,000) = $550,000 when future work proceeds at planned rate.

Question 3

What type of cost estimate is typically produced during the conceptual phase of a project with an accuracy range of -30% to +50%?

Accepted Answer

Order of magnitude estimate

Answer

An order of magnitude estimate, used early in project development, typically has an accuracy range of -30% to +50%.

Question 4

Which contingency reserve approach allocates reserve based on a percentage applied to individual work packages?

Accepted Answer

Activity-level contingency

Answer

Activity-level contingency applies a percentage or fixed amount to each work package to cover identified uncertainties.

Question 5

When using the factor method for cost estimation, what is the basis for calculating equipment-related costs?

Accepted Answer

Major equipment cost

Answer

The factor method uses major equipment cost as the base and applies factors to estimate other cost components like installation, piping, and instrumentation.

(CCT) Certified Cost Technician Practice Test

(CCT) Certified Cost Technician Practice Test

CCT Cost Estimation & Budgeting 2