CLC 056 – ANALYZING CONTRACT COSTS exam | latest update 2022

CLC 056 – ANALYZING CONTRACT COSTS exam 1) Given the following data, calculate the standard deviation. Sample data: 13, 12, 9, 15, 11, 16, 17, 8, 12, 7, 12 3.05 3.19 4.21 4.12 2) Who has the authority to waive CAS applicability for a particular contract? A level above the contracting officer The Agency Head The Contracting Officer's Representative The Cognizant Federal Agency Official 3) Which sampling technique is used to focus on high-value items? Stratified Nonprobability Random Cluster 4) Which of the following are factors used in calculating the Facilities Capital Cost of Money (FCCOM) amount? Division-wide allocation base amounts Company-wide allocation base amounts Proposal allocation base amounts Percentage of land, building, and profit distributions 5) Which of the following is a grouping of all positions that share the same title and pay level? mig_ 1 1 mig_ 1 1 Position classification plan Direct labor position Position description Position class 6) The purpose of an audit is to: All of these are correct Verify transaction legality Determine the degree of compliance with established procedures Determine if the data is accurate and complete 7) Which of the following labor classifications most likely involves fashioning parts from raw materials or purchased materials? Quality Control Fabrication Assembly Engineering 8) What is the government’s primary objective in negotiations? To ensure the agreed to price is the same, or lower, than the government’s objective To establish a profit/fee percentage that is in line with previous contracts with the particular contractor To agree on each element of cost with the contractor To agree on a price that is fair and reasonable to the government and the contractor 9) Which contract clause is inserted in contracts that are subject to full CAS coverage? FAR 52.230-2 Cost Accounting Standards mig_ 1 mig_ 1 mig_ 1 mig_ 1 mig_ 1 FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-1 Cost Accounting Standards Notices and Certification FAR 52.230-5 Cost Accounting Standards – Educational Institutions 10) Select the item below that would likely be categorized as a Direct Material cost. Rail transportation used to get the materials to the offeror's facility The purchase of 104 motor assemblies needed to manufacture a product Extra material or items that are left over from the contract and cannot be used Washers and seals used in the assembly process for all products 11) What is an important driver to a successful negotiation? Obtain the lowest price for the government Listen to understand Maintain position of power Ensure your position is heard 12) Which of the following is known as a “Questioned Cost”? Costs that have not yet been evaluated Costs on which audit action has been completed and which are not considered as acceptable as a contract cost Arithmetic difference between the amount proposed and the sum of the related questioned, unsupported, and unresolved amounts Costs which the auditor cannot evaluate as allowable or unallowable, because there is not enough information for analysis 13) Which of the following must be true to properly classify a cost as an “other direct cost”? The proposed cost benefits only the proposed contract work The contractor’s accounting system segregates “other direct costs” from similar indirect costs mig_ 1 mig_ 1 mig_ 1 mig_ 1 The offeror customarily treats similar costs as “other direct costs” under similar circumstances All of these 14) 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 Developing a price negotiation objective for labor costs Selecting the appropriate contract type Assigning the risk factors for profit calculations Evaluating the bill of materials 15) When calculating the confidence interval, why is the sample standard deviation used to derive the standard error of the mean? The coefficient of variation is unknown Other methods of central tendency are not reliable The sample mean is used to derive the significance level The population standard deviation is not generally known 16) Identify the circumstances when cost analysis should be performed by answering the following question. “Unless an exception to certified cost or pricing data applies, you can perform cost analysis on which of the following procurements?” The award of a subcontract at any tier, if the contractor and each higher-tier subcontractor have been required to furnish certified cost or pricing data All of these are correct The award of any negotiated contract (except for undefinitized actions such as letter contracts The modification of any sealed bid or negotiated contract 17) What is the most common base for calculating the General and Administrative (G&A) overhead rate? Total of all costs mig_ 1 1 mig_ 1 mig_ 1 Total G&A expense Total management cost Total price 18) What is the “base” that used in the calculation of the performance risk, contract type risk, and cost efficiency factor when using the weighted guidelines to determine a profit/fee objective? Total costs Direct and Indirect costs Subtotal of costs Total price 19) Which of the following is the best method for determining if a proposed cost is reasonable? Evaluating the conditions surrounding the procurement. In cases of National Emergency or Contingency, any cost within 50% of the IGE is considered reasonable Comparing with other competitive proposals received in response to the solicitation Ensuring the proposed cost is no more than 25% greater than the last known procurement of the item Performing a quantitative analysis of the proposed cost using multivariate regression 20) How may you request an audit? All of these are correct By telephone call By mail By e-mail 21) Identify the objective of performing proposal analysis. To ensure the government negotiates the lowest possible price for goods and services To gain a more complete understanding of the company’s rates and factors mig_ 1 mig_ 1 mig_ 1 mig_ 1 To provide the contract negotiator the best possible profit or fee objective To ensure the final agreed to price is fair and reasonable 22) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? Examine proposed hours on other contracts from the same contractor Compare proposed hours with a Government should-cost estimate Decrement labor hours estimate according to DCAA standard decrement Use a stratified sampling techniques to evaluate contractor’s labor hour estimate 23) A cost is allowable if it is: Consistent, uniform, and reasonable According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be accurate, current and complete Reasonable, allocable and compliant with CAS/GAAP Established, disclosed and allocated 24) What is the negotiation term that reflects each party emphasizing the long term effects and benefits as well as both parties defining their interests to be achieved in conjunction with the outcome? Lose-Lose Win-Lose-Win Win-Lose Win-Win 25) Which of the following is true about analyzing summary cost estimates? The effects of price inflation are not considered in determining if direct comparisons were properly developed and applied As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases mig_ 1 mig_ 1 mig_ 1 mig_ 1 Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique If a summary level estimate is as good as a detailed analysis, it is still required to use a detailed analysis 26) Which regression method assumes a linear relationship between the dependent and independent variables? Local regression Segmented regression Simple linear regression Curvilinear regression 27) Given the improvement curve data, calculate the cost objective for unit #8.  Labor hours for unit #4: 120 hours  Labor hours for unit #1: 160 hours  Rate of improvement: 10%  Improvement curve slope: 90% 12 108 144 16 28) A measure of the amount of dispersion, or distance, between data points is the: Standard Deviation () Absolute dispersion Relative dispersion (rel.Disp) Coefficient of variation () 29) Which of the following is a phase in the allocation cycle? Adjustment on Rates Phase mig_ 1 mig_ 1 mig_ 1 mig_ 1 Final Allocation Phase Interim Processing Phase Continuous Rate Application Phase 30) Which of the following situations would the use of improvement curve analysis likely be useful in evaluating proposed costs? Fabrication of a single jet engine frame assembly Fabrication of a new aircraft carrier Assembly of two prototype aerial refueling airplanes Assembly line repair of a turret assembly for an M1/A2 Abrams tank 31) Identify the formula for calculating indirect cost rates. Expense Pool divided by Allocation Base Allocation Base divided by Expense Pool Overhead Rate multiplied by Allocation Base Allocation Base multiplied by Expense Pool 32) Each Price Negotiation Memorandum must contain which of the following? Signature of the Contract Specialist Statement that the FAR was consistently followed Statement that the price is fair and reasonable Signature of the Legal Counsel 33) Which variable is also considered the independent variable? X R mig_ 1 mig_ 1 mig_ 1 mig_ 1 Y Z 34) Identify the correct definition of “Cost Realism Analysis.” The review and evaluation of individual cost elements, excluding profit, in a proposal The process of examining and evaluating a proposal to ensure all elements of cost are in line with the Independent Government Estimate The review of a proposal to ensure the contractor has properly documented adherence to their approved estimating system guidelines The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement 35) In reviewing the proposal for the robotic surveillance vehicle you asked for clarification on the travel cost listed as an ODC. Which response would justify travel as an ODC? The travel costs are for the project manager and the manufacturing supervisor to deliver the prototype to the Government testing site for final demonstration testing. The travel costs are for warehouse personnel to attend OSHA training on how to safely handle hazardous materials. The travel costs are for several senior engineers to attend a conference on the latest development in manufacturing. The travel costs are for the corporate vice president to attend the annual robotic association meeting. 36) Which of the following is an effective use of stratified sampling? Analyzing 10% of the items selected randomly Analyzing 20% of the items that are under $25,000 Analyzing 100% of the items Analyzing the items that make up 80% of the total material cost and 10% of the remaining items 37) Which of the following is a factor that affects profit/fee calculations? Profit/fee percentage historically paid to contractor mig_ 1 mig_ 1 mig_ 1 mig_ 1 Distribution of equipment percentage Magnitude of the contract in dollars Contract type 38) How is simple linear regression used? To ensure contractor’s estimates properly capture the reduction of labor costs associated with repetitive production tasks To calculate an estimate that demonstrates the most likely average value based on the data supplied To make predictions about one dependent variable based on more than one independent variable To make predictions about one dependent variable based on one independent variable 39) When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the following statements is true? They acknowledge their reliance on that cost or pricing data by signing the Price Negotiation Memorandum They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum They must certify that they relied on that certified cost or pricing data in the Price Negotiation Memorandum They must have had legal counsel review the cost or pricing data prior to negotiations 40) When calculating profit/fee, how is the “performance risk (composite)” calculated? By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together By multiplying the assigned values of the technical and management/cost control elements By adding the assigned weights and assigned values of the technical and management/cost control elements By adding the assigned weight and assigned value of the technical and management/cost control elements and dividing the sum by 2 41) Which of the following situations would require a Disclosure Statement? mig_ 1 mig_ 1 mig_ 1 Anytime a sole-source contract is awarded Contractor receives a contract valued at $7.5M or greater Contractor receives a CAS covered contract or a subcontract valued at $50M in a cost accounting period Anytime a cost reimbursement contract is awarded 42) The pre-negotiation objective establishes the government's initial negotiation position and assists the contracting officer in determining a fair and reasonable price. How does proposal modeling assist the contracting officer in achieving these objectives? (Choose all that apply) Facilitates update of pre-negotiation position upon receipt of updates from the contractor (e.g. updated quotes, subcontractor submissions, change in rates) Validates the contractor's proposal summary with detailed back-up data worksheets Validates the contractor's computations Allows real time calculation of offers and counteroffers during negotiations 43) A cost is allocable if it: Results in an inequitable allocation of costs. Is distributed equally among the benefiting contracts Is reasonable and allowable Is incurred specifically for the contract 44) What is the best method for determining an improvement curve slope? Using the median percentage from similar products Using actual historical data Using established slopes derived on recent procurements Using established slopes from the Cost Estimator’s Reference Manual 45) For which of the following procurements would you require certified cost or pricing data? mig_ 1 mig_ 6 mig_ 1 mig_ 1 mig_ 1 An offer of $800,000 for an item from the only known source of an electronic system unique to Government requirements A single-source offer for $96,000 for Research and Development An offer of $525,000 for a catalog-priced commercial item A commercial item contract modification which indicates that $398,000 of work will be removed by modification and $390,000 of work will be added. 46) When using simple linear regression to analyze the estimated price for a used car, which of the following independent variables would most likely result in the most accurate estimating equation? Exterior color of all similar cars Mileage of all similar cars Body style of all similar cars Interior color of all similar cars 47) Which of these situations warrants the use of a round-table estimate? A contract is for $900,000 and there have been several similar contracts performed in the past. Usually, offerors will use comparison estimates for this type of work. A contract is for a service that has been provided in the past, and offerors will need to submit data detailing the time it will take for each worker to complete a specific task. A contract is for a service that has been provided in the past, and offerors will need to submit data detailing the time it will take for each worker to complete a specific task. A contract is for a unique item, and there is no historical data available (i.e., detailed drawings, bill of materials, firm specifications). 48) Which of the following is an exception to the requirement to provide certified cost or pricing data? When the contracting officer determines the prices agreed upon are based on identical forecasting methods utilized in the Independent Government Estimate (IGE) Adequate price competition Proposal is less than $7.5 M Repetitive buy of same or similar item where certified cost or pricing data had been provided in past 1 mig_ 1 mig_ 1 49) When material prices may vary significantly from current inventory values, which estimating method should be used? Current Quotes Historical Quotes Long Term Agreement Pricing Inventory Pricing 50) What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent known as? Exception to certified cost or pricing data Defective Pricing CICA Violation Data other than cost or pricing data 51) When is it most appropriate to document or model a contractor’s proposal? Anytime you award a competitive contract Whenever there are values in excess of $1M included in the proposal When the value, importance, and complexity warrant When analyzing multiple commercial supply proposals 52) What is the single most important decision the Contracting Officer must make to mitigate cost risk? The profit/fee percentage objective Selection of contract type The selection of a the awardee Whether to solicit to large business, or set aside for small business only 53) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal. mig_ 1 mig_ 1 mig_ 1 mig_ 1 Does the contractor compensate their employees for unpaid overtime? Is the proposed skill mix identical to the independent government estimate? Does the contractor currently employ workers in all proposed labor categories? Is the proposed skill mix reasonable for the work required? 54) The two cost accounting systems that are used by a contractor manufacturing a number of specifically identifiable physical units and whose costs are normally accumulated under separate orders is: Cost Accounting Standards Job Order Accounting Generally Accepted Accounting Practice Process Cost System 55) Identify the first step in conducting stratified sampling. Develop the decrement factor Group like items together Identify items for 100% analysis Randomly select a sample size equal to 20% of the total number of items mig_ 1 6 mig_ 1