CPCM Cost and Price Analysis 2

Question 1

Which profit/fee negotiation objective tool does DCAA use to assess contractor risk and effort when determining a reasonable profit?

Accepted Answer

Weighted Guidelines Method

Answer

Truth in Negotiations Act checklist

Answer

Defense Contract Audit Manual (DCAM) cost review

Answer

SBA profit reasonableness form

Question 2

An indirect cost rate is calculated by dividing:

Accepted Answer

Total indirect costs by total direct costs in the base

Answer

Total profit by total contract value

Answer

Direct labor hours by total overhead costs

Answer

Total revenue by number of contracts

Question 3

Under FAR 31.205-6, which type of compensation cost requires a cap when charged to government contracts?

Accepted Answer

Executive compensation above the statutory benchmark

Answer

Fringe benefits for hourly workers

Answer

Overtime premium for production employees

Answer

Training costs for contract-specific skills

Question 4

The forward pricing rate agreement (FPRA) is primarily used to:

Accepted Answer

Establish agreed-upon indirect cost rates for use in pricing future contracts and modifications

Answer

Lock in a firm fixed price before contract negotiation begins

Answer

Guarantee the contractor a minimum profit margin

Answer

Replace the requirement for certified cost or pricing data

Question 5

Which cost principle governs the allowability of entertainment costs on government contracts?

Accepted Answer

FAR 31.205-14 makes entertainment costs generally unallowable

Answer

FAR 31.205-1 allows entertainment if it promotes contractor morale

Answer

Entertainment costs are allowable up to 2% of total contract value

Answer

Entertainment costs are allowable only for foreign customers

Question 6

A Cost Performance Report (CPR) is required on contracts that have an Earned Value Management System (EVMS) because it:

Accepted Answer

Provides integrated cost and schedule data to the government for oversight of contract performance

Answer

Replaces the need for a contracting officer's representative

Answer

Documents all subcontractor payments for audit purposes

Answer

Certifies that all invoices have been reviewed for allowability