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.

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  1. During budget review, a project shows a Schedule Performance Index (SPI) of 1.10 and a CPI of 0.92. Which statement best describes the project's status?

    Answer: Ahead of schedule and over budget

    SPI > 1.0 means ahead of schedule; CPI < 1.0 means over budget — the project is progressing faster than planned but spending more than earned.

  2. A 'bottom-up' estimate differs from a 'top-down' estimate primarily because it:

    Answer: Builds cost from individual work packages and rolls them up to a total

    Bottom-up estimating prices each detailed work element individually and aggregates them to arrive at the total project cost.

  3. Which cost component is most directly affected by changes in a project's general conditions requirements?

    Answer: Indirect field overhead costs

    General conditions (site trailer, temporary utilities, supervision) are indirect field overhead costs that change significantly with project duration and site requirements.

  4. A cost estimator is asked to provide a ROM (Rough Order of Magnitude) estimate. The expected accuracy range for this estimate type is typically:

    Answer: -25% to +75%

    ROM estimates, developed at the earliest project stages with minimal scope definition, typically carry an accuracy range of −25% to +75% per AACE guidelines.

  5. When a contractor submits a Schedule of Values (SOV) for a lump-sum contract, the primary purpose is to:

    Answer: Establish the basis for progress payment requests throughout the project

    The SOV allocates the contract sum across work items and serves as the foundation for calculating monthly progress payments and stored materials.

  6. Fixed costs on a construction project are best described as costs that:

    Answer: Remain constant regardless of the quantity of work performed

    Fixed costs do not change with output volume; examples include permit fees, mobilization costs, and lump-sum equipment rentals.

  7. A project contingency budget is MOST appropriately sized based on:

    Answer: A quantitative risk analysis reflecting identified uncertainties and their probability-weighted impact

    Best practice ties contingency to a quantitative risk analysis (e.g., Monte Carlo simulation) that captures the probability and impact of identified risks.