CDFM Budget and Cost Analysis 3

Question 1

What is the 'bona fide needs' rule as it applies to appropriations?

Accepted Answer

An obligation must benefit a genuine need of the period for which the appropriation was made

Answer

The bona fide needs rule (31 U.S.C. § 1502) requires that appropriated funds only be obligated for genuine needs that arise during the period of availability of that appropriation.

Question 2

In DoD cost analysis, 'wrap rate' most commonly refers to:

Accepted Answer

The overhead rate applied to a contractor's direct labor costs

Answer

A wrap rate is the composite rate that multiplies a contractor's direct labor cost to include overhead, fringe benefits, G&A, and fee, giving the fully loaded labor cost.

Question 3

Which document formally establishes the baseline cost, schedule, and technical performance parameters for a major defense acquisition program?

Accepted Answer

Acquisition Program Baseline (APB)

Answer

The Acquisition Program Baseline (APB) documents the threshold and objective values for cost, schedule, and performance that define program success and trigger reporting requirements if breached.

Question 4

What does a Cost Performance Index (CPI) value of 0.85 indicate in an EVM report?

Accepted Answer

For every dollar spent, only $0.85 of planned work has been accomplished

Answer

CPI = BCWP ÷ ACWP; a CPI of 0.85 means the project is getting only 85 cents of earned value for every dollar actually spent, indicating a cost overrun.

Question 5

Under the Antideficiency Act (31 U.S.C. § 1341), which action is prohibited?

Accepted Answer

Obligating funds in excess of amounts available in an appropriation

Answer

The Antideficiency Act prohibits obligating or expending funds in excess of amounts available in an appropriation or in advance of an appropriation, with criminal and administrative penalties.

CDFM - Certified Defense Financial Manager Practice Test

CDFM - Certified Defense Financial Manager Practice Test

CDFM Budget and Cost Analysis 3