CLC 056 Analyzing Contract Costs
Study Guide Exam Questions With
Correct Answers
According to FAR 15.4, which of the following is one of the two most preferred price
analysis techniques? - ANSWER- Comparison of proposed prices received in response
to the solicitation *
How may you request an audit? - ANSWER- All of these are correct
A "questioned cost" is one that has not yet been evaluated. - ANSWER- False *
True or False: "Direct labor positions" share the same titles and pay levels. - ANSWER-
False *
For which of the following procurements would you require certified cost or pricing data?
- ANSWER- An offer of $800,000 for an item from the only known source of an
electronic system unique to Government requirements.
How is simple linear regression used? - ANSWER- To make predictions about one
dependent variable based on one independent variable *
Which of the following is a phase in the allocation cycle? - ANSWER- Final Allocation
Phase
You are preparing to negotiate a service task for routine maintenance of Government
equipment. A sample of 25 records for similar maintenance tasks indicates that the
average time required to perform similar maintenance tasks has been six hours and 40
minutes. How can you use this? - ANSWER- Selecting the appropriate contract type
Developing a price negotiation objective for labor costs *
Evaluating the bill of materials
Assigning the risk factors for profit calculations
The purpose of an audit is to: - ANSWER- Verify transaction legality
Determine if the data is accurate and complete
All of these are correct *
Determine the degree of compliance with established procedures
Who has the authority to waive CAS applicability for a particular contract? - ANSWER-
The Agency Head *
A cost is allowable if it is: - ANSWER- Reasonable, allocable and compliant with
CAS/GAAP *
,What is an important driver to a successful negotiation? - ANSWER- Listen to
understand *
Which regression method assumes a linear relationship between the dependent and
independent variables? - ANSWER- Simple linear regression *
What is the single most important decision the Contracting Officer must make to
mitigate cost risk? - ANSWER- Selection of contract type *
When a contract is subject to CAS, the Contracting Officer may not award a contract
until a written adequacy determination has been made by the cognizant Federal agency
official. - ANSWER- True
Each Price Negotiation Memorandum must contain which one of the following? -
ANSWER- Statement that the price is fair and reasonable *
Select the item below that would likely be categorized as a Direct Material Cost. -
ANSWER- The purchase of 104 motor assemblies needed to manufacture vehicles *
Using a direct comparison with the cost of a similar contract effort is an acceptable
summary estimating technique. - ANSWER- True *
Which of the following would be a proper method of determining the reasonableness of
a contractor's proposed labor hour estimate? - ANSWER- -Compare proposed hours
with a Government should-cost estimate *
A Disclosure Statement is required when Contractor receives a CAS covered contract
or a subcontract valued at $60 million in a cost accounting period. - ANSWER- True *
Identify the ultimate objective of performing proposal analysis. - ANSWER- To ensure
the final agreed to price is fair and reasonable *
Identify the correct definition of "Cost Analysis". - ANSWER- The review and evaluation
of individual cost elements and proposed profit/fee in and offeror's proposal *
True or False: The national average mortgage rate is used in calculating Facilities
Capital Cost of Money (FCCOM) - ANSWER- False *
Which of the following is an effective use of stratified sampling? - ANSWER- Analyzing
the items that make up 80% of the total material cost and 10% of the remaining items
When is it most appropriate to document or model a contractor's proposal? - ANSWER-
When the value, importance, and complexity warrant the modeling *
, When is the working capital adjustment used while calculating profit/fee? - ANSWER-
On all fixed price contracts with progress payments *
The cost accounting systems that are used by a contractor manufacturing a number of
identical units for multiple customers are: - ANSWER- -Generally Accepted Accounting
Practice
-Cost Accounting Standards
True or False: Special test equipment that is engineered, designed, fabricated, or
modified to meet specific contract needs and cannot be used for other contracts can be
categorized as "other direct costs". - ANSWER- True *
When the Contracting Officer has relied on certified cost or pricing data in the price
determination, which of the following statements is true? - ANSWER- They must certify
that they relied on that certified cost or pricing data in the Price Negotiation
Memorandum *
The first step when conducting stratified sampling is to identify the population of items to
be sampled. - ANSWER- True *
What is the most common base for calculating the General and Administrative (G&A)
overhead rate? - ANSWER- Total of all costs *
A measure of the amount of dispersion, or distance, between data points is the: -
ANSWER- Standard Deviation *
Which of the following is the preferred method for determining if a proposed cost is
reasonable? - ANSWER- Comparing with other competitive proposals received in
response to the solicitation *
Which situation below would you use improvement curve analysis to evaluate proposed
costs? - ANSWER- Assembly line with high proportion of manual labor *
Which of the following situations are considered exempt from the submission of
Certified Cost or Pricing Data? - ANSWER- Prices are set by law or regulation. *
When calculating the confidence interval, the sample standard deviation is used to
derive the standard error of the mean. - ANSWER- True
Identify the response below that correctly describes the term "Data other than certified
cost or pricing data". - ANSWER- Pricing data, cost data, and judgmental information
that is not certified, but is used to determine a fair and reasonable price
Which sampling technique is used to focus on high-value items? - ANSWER- Stratified *
Study Guide Exam Questions With
Correct Answers
According to FAR 15.4, which of the following is one of the two most preferred price
analysis techniques? - ANSWER- Comparison of proposed prices received in response
to the solicitation *
How may you request an audit? - ANSWER- All of these are correct
A "questioned cost" is one that has not yet been evaluated. - ANSWER- False *
True or False: "Direct labor positions" share the same titles and pay levels. - ANSWER-
False *
For which of the following procurements would you require certified cost or pricing data?
- ANSWER- An offer of $800,000 for an item from the only known source of an
electronic system unique to Government requirements.
How is simple linear regression used? - ANSWER- To make predictions about one
dependent variable based on one independent variable *
Which of the following is a phase in the allocation cycle? - ANSWER- Final Allocation
Phase
You are preparing to negotiate a service task for routine maintenance of Government
equipment. A sample of 25 records for similar maintenance tasks indicates that the
average time required to perform similar maintenance tasks has been six hours and 40
minutes. How can you use this? - ANSWER- Selecting the appropriate contract type
Developing a price negotiation objective for labor costs *
Evaluating the bill of materials
Assigning the risk factors for profit calculations
The purpose of an audit is to: - ANSWER- Verify transaction legality
Determine if the data is accurate and complete
All of these are correct *
Determine the degree of compliance with established procedures
Who has the authority to waive CAS applicability for a particular contract? - ANSWER-
The Agency Head *
A cost is allowable if it is: - ANSWER- Reasonable, allocable and compliant with
CAS/GAAP *
,What is an important driver to a successful negotiation? - ANSWER- Listen to
understand *
Which regression method assumes a linear relationship between the dependent and
independent variables? - ANSWER- Simple linear regression *
What is the single most important decision the Contracting Officer must make to
mitigate cost risk? - ANSWER- Selection of contract type *
When a contract is subject to CAS, the Contracting Officer may not award a contract
until a written adequacy determination has been made by the cognizant Federal agency
official. - ANSWER- True
Each Price Negotiation Memorandum must contain which one of the following? -
ANSWER- Statement that the price is fair and reasonable *
Select the item below that would likely be categorized as a Direct Material Cost. -
ANSWER- The purchase of 104 motor assemblies needed to manufacture vehicles *
Using a direct comparison with the cost of a similar contract effort is an acceptable
summary estimating technique. - ANSWER- True *
Which of the following would be a proper method of determining the reasonableness of
a contractor's proposed labor hour estimate? - ANSWER- -Compare proposed hours
with a Government should-cost estimate *
A Disclosure Statement is required when Contractor receives a CAS covered contract
or a subcontract valued at $60 million in a cost accounting period. - ANSWER- True *
Identify the ultimate objective of performing proposal analysis. - ANSWER- To ensure
the final agreed to price is fair and reasonable *
Identify the correct definition of "Cost Analysis". - ANSWER- The review and evaluation
of individual cost elements and proposed profit/fee in and offeror's proposal *
True or False: The national average mortgage rate is used in calculating Facilities
Capital Cost of Money (FCCOM) - ANSWER- False *
Which of the following is an effective use of stratified sampling? - ANSWER- Analyzing
the items that make up 80% of the total material cost and 10% of the remaining items
When is it most appropriate to document or model a contractor's proposal? - ANSWER-
When the value, importance, and complexity warrant the modeling *
, When is the working capital adjustment used while calculating profit/fee? - ANSWER-
On all fixed price contracts with progress payments *
The cost accounting systems that are used by a contractor manufacturing a number of
identical units for multiple customers are: - ANSWER- -Generally Accepted Accounting
Practice
-Cost Accounting Standards
True or False: Special test equipment that is engineered, designed, fabricated, or
modified to meet specific contract needs and cannot be used for other contracts can be
categorized as "other direct costs". - ANSWER- True *
When the Contracting Officer has relied on certified cost or pricing data in the price
determination, which of the following statements is true? - ANSWER- They must certify
that they relied on that certified cost or pricing data in the Price Negotiation
Memorandum *
The first step when conducting stratified sampling is to identify the population of items to
be sampled. - ANSWER- True *
What is the most common base for calculating the General and Administrative (G&A)
overhead rate? - ANSWER- Total of all costs *
A measure of the amount of dispersion, or distance, between data points is the: -
ANSWER- Standard Deviation *
Which of the following is the preferred method for determining if a proposed cost is
reasonable? - ANSWER- Comparing with other competitive proposals received in
response to the solicitation *
Which situation below would you use improvement curve analysis to evaluate proposed
costs? - ANSWER- Assembly line with high proportion of manual labor *
Which of the following situations are considered exempt from the submission of
Certified Cost or Pricing Data? - ANSWER- Prices are set by law or regulation. *
When calculating the confidence interval, the sample standard deviation is used to
derive the standard error of the mean. - ANSWER- True
Identify the response below that correctly describes the term "Data other than certified
cost or pricing data". - ANSWER- Pricing data, cost data, and judgmental information
that is not certified, but is used to determine a fair and reasonable price
Which sampling technique is used to focus on high-value items? - ANSWER- Stratified *
