Practice Test Geeks(CPE) Certified Professional Estimator Practice Test
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Cost Analysis and Budgeting Flashcards

7 cards from real CPE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Cost Analysis and Budgeting flashcards as text

  1. A project budget shows a Cost Performance Index (CPI) of 0.85. What does this indicate?

    Answer: The project is getting $0.85 of value for every $1 spent

    A CPI of 0.85 means the project is over budget, receiving only $0.85 in earned value for every dollar actually spent.

  2. Which budgeting technique allocates costs based on the percentage of total project work each activity represents?

    Answer: Proportional allocation

    Proportional allocation distributes budget across activities based on their share of total project scope or work units.

  3. When performing a cost-benefit analysis, the payback period is defined as:

    Answer: The time required to recover the initial investment from net cash flows

    The payback period measures how long it takes for cumulative net cash inflows to equal the initial capital investment.

  4. A cost estimator is reviewing a budget with a Management Reserve. What is the primary purpose of a Management Reserve?

    Answer: To handle unknown unknowns and unforeseen scope changes

    Management Reserve is held for unknown-unknown risks and unexpected events outside the project baseline, not for planned contingencies.

  5. Which of the following best describes a 'should-cost' analysis in project estimating?

    Answer: An independent government or owner estimate of what work should reasonably cost

    A should-cost analysis is an independent estimate developed by the owner or client to assess what a product or service should reasonably cost, used to evaluate contractor proposals.

  6. In budget development, 'cost loading' of a schedule refers to:

    Answer: Assigning budgeted costs to specific schedule activities to enable cash flow analysis

    Cost loading assigns dollar values to schedule activities, enabling time-phased budget and cash flow forecasting.

  7. An estimator calculating the cost of a concrete pour uses a productivity rate of 15 CY/hour with a crew cost of $120/hour. What is the unit cost per cubic yard?

    Answer: $8.00/CY

    Unit cost = crew cost ÷ productivity rate = $120/hr ÷ 15 CY/hr = $8.00 per cubic yard.