CDFM Working Capital Fund Management 3

Question 1

When a WCF business area's actual costs exceed its budgeted costs mid-year, the preferred course of action is to:

Accepted Answer

Absorb the variance and adjust rates in the next budget cycle

Answer

Immediately increase rates charged to customers during the current fiscal year

Answer

Request a direct supplemental appropriation from Congress

Answer

Transfer costs to a Military Department's O&M appropriation

Question 2

What is the role of the 'customer fund' relationship in WCF operations?

Accepted Answer

Customers use their own appropriations to order and pay for WCF goods and services

Answer

Customers receive annual grants from the WCF to purchase services

Answer

WCF activities directly manage customer unit budgets

Answer

Customers must relinquish appropriated funds to the WCF at the start of each fiscal year

Question 3

Which of the following best describes the 'two-year budget cycle' concept for WCF pricing?

Accepted Answer

WCFs evaluate break-even performance across the current and budget year to assess rate adequacy

Answer

WCF prices are set every two years by an act of Congress

Answer

WCF employees receive pay increases on a two-year cycle

Answer

Capital expenditures are reviewed every two years by OMB

Question 4

In the context of DoD WCF, what is an 'activity group'?

Accepted Answer

A distinct business line within a WCF that provides specific goods or services and maintains separate financial accounts

Answer

A congressional caucus that oversees defense revolving funds

Answer

A group of military personnel assigned to manage WCF investments

Answer

A joint venture between DoD and private sector contractors

Question 5

Which of the following is NOT a characteristic of a DoD Working Capital Fund?

Accepted Answer

Annual appropriation expiration — funds expire at fiscal year-end

Answer

Revolving nature — fund replenishes itself from customer revenues

Answer

Break-even objective over the long term

Answer

Use of stabilized rates to enhance customer budget predictability

Question 6

The Defense Working Capital Fund Budget Submission is submitted as part of which document?

Accepted Answer

The President's Budget (PB) as a separate volume for WCF business areas

Answer

The National Defense Authorization Act (NDAA)

Answer

The Federal Acquisition Regulation (FAR)

Answer

The Unified Command Plan (UCP)

Question 7

What is the significance of 'cost of goods sold (COGS)' for a WCF supply management activity group?

Accepted Answer

COGS is the primary expense recognized when inventory items are issued to customers, used to calculate break-even

Answer

COGS represents the profit margin charged to customers above the acquisition price

Answer

COGS is a penalty charge assessed when suppliers deliver late

Answer

COGS measures the total administrative overhead of the WCF headquarters