PCC Cost Estimation & Budgeting 3

Question 1

Which AACE International estimate class is associated with a screening or feasibility study and typically has an accuracy range of -20% to +30%?

Accepted Answer

Class 5

Answer

AACE Class 5 estimates are used for concept screening with the lowest scope definition (0–2%) and widest accuracy range.

Question 2

A project controls engineer calculates the Estimate to Complete (ETC) by assuming future work will be performed at the budgeted rate. Which formula does this approach use?

Accepted Answer

ETC = BAC – EV

Answer

When future work is assumed to proceed at the planned rate, ETC = BAC – EV (remaining budget).

Question 3

In a lump-sum contract, who primarily bears the risk of cost overruns due to scope growth initiated by the contractor?

Accepted Answer

The contractor

Answer

In a lump-sum (fixed-price) contract, the contractor bears the risk of most cost overruns not caused by owner-directed scope changes.

Question 4

What is the primary purpose of an independent project cost review (ICR) or independent cost estimate (ICE)?

Accepted Answer

To provide an unbiased check of the project estimate for decision-making

Answer

An ICE/ICR provides an independent validation of cost estimates to support project approval decisions and reduce bias.

Question 5

When escalation is applied to a cost estimate, what factor is primarily being accounted for?

Accepted Answer

Inflation and price changes over the project duration

Answer

Escalation adjusts estimates for anticipated inflation and price level changes expected over the life of the project.

(PCC) Project Controls Certification Practice Test

(PCC) Project Controls Certification Practice Test

PCC Cost Estimation & Budgeting 3