CLC 056 Final Exam Questions And Answers( Complete Solution Rated A)

CLC 056 Final Exam Analyzing Contract Costs Exam (contains 55 questions) • Here is your test result.The dots represent the choices you have made. • The highlighted questions are the quest ions you have missed. • Remediation Accessed shows whether you accessed those links.'N' represents links not visited and 'Y' represents visited links. The offeror customarily treats similar costs as “other direct costs” under similar circumstances The proposed cost benefits only the proposed contract work The contractor’s accounting system segregates “other direct costs” from similar indirect costs All of these Engineered, designed, fabricated, or modified to meet not only the requirements of the current contract but also the requirements of all other contracts Developed and engineered by a subcontractor who is not currently working on another contract An item (e.g., fixture, pattern, or gauge) that is necessary in aiding the development of a unique product Engineered, designed, fabricated, or modified to meet specific contract needs and cannot be used for other contracts 3.) What is the most common base for calculating the General and Administrative (G&A) overhead rate? [Identify indirect cost pools and bases] [Remediation Accessed: N] Total price Total G&A expense Total management cost Total of all costs Expense pool and Allocation base Allocation base and Overhead rate Overhead rate and Expense base Allocation Pool and Expense base Billing Phase Forward Pricing Phase Beginning Payment Phase Final Allocation Phase Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office Calculating the mean cost of one individual unit in a production run of 10,000 units Estimating the cost of a new armored vehicle based on historical costs of similar procurements Analyzing the accuracy of a should-cost analysis generated by a DCMA Industrial Engineer 7.) Which regression method would be used when there is more than one independent variable? [Identify the different regression analysis methods] [Remediation Accessed: N] Multivariate regression Segmented regression Curvilinear regression Simple linear regression 8.) Identify the situation where you would use simple linear regression. Indirect cost rate analysis Labor classification analysis Facilities Capital Cost of Money calculation Profit objective calculation 9.) Which variable is also considered the independent variable? Y Z X R 10.) Which of the following situations would the use of improvement curve analysis likely be useful in evaluating proposed costs? [Identify situations where improvement curve analysis would be appropriate] [Remediation Accessed: N] Fabrication of a single jet engine frame assembly Assembly of two prototype aerial refueling airplanes Assembly line repair of a turret assembly for an M1/A2 Abrams tank Fabrication of a new aircraft carrier 11.) What is the first step in conducting improvement curve analysis? Determine the Theoretical value of unit #1 Collect the historical data Calculate the slope of the curve Calculate the rate of improvement 15,800 8,400 62,200 33,600 Division-wide allocation base amounts Percentage of land, building, and profit distributions Company-wide allocation base amounts Proposal allocation base amounts 14.) Which of the following statements is true concerning profit/fee calculations? [Identify the factors affecting profit/fee analysis] [Remediation Accessed: N] Profit/fee is calculated differently depending on DPAS rating of the contract Profit/Fee is calculated once for the basic contract and must not be recalculated on subsequent modifications Profit/fee objectives are a product of risk Profit/fee objectives are reduced by the cost efficiency factor 15.) When calculating profit/fee, how is the “performance risk (composite)” calculated? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed: N] By adding the assigned weights and assigned values of the technical and management/cost control elements By multiplying the 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 By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together 15% 1% 10% 6% 17.) Which of the following factors is critical to a successful negotiation? The negotiation should be competitive Avoid being too friendly, in case the negotiations get difficult Effectively prepare, plan, and communicate Set your opening position extremely low to give room to negotiate Win-Lose-Win Lose-Lose Win-Lose Win-Win 19.) What is an important driver to a successful negotiation? Ensure your position is heard Obtain the lowest price for the government Listen to understand Maintain position of power Whether to solicit to large business, or set aside for small business only The profit/fee percentage objective Selection of contract type The selection of a the awardee 21.) Each Price Negotiation Memorandum must contain which of the following? Statement that the price is fair and reasonable Signature of the Legal Counsel Signature of the Contract Specialist Statement that the FAR was consistently followed 22.) According to FAR 15.4, which of the following is one of the two most preferred price Comparison of proposed prices with Independent Government Estimates (IGE) Comparison with competitive published price lists Comparison of proposed prices received in response to the solicitation Use of parametric estimating methods to highlight significant inconsistencies Defective Pricing Data other than cost or pricing data Exception to certified cost or pricing data CICA Violation Prices are set by law or regulation Price may be determined fair and reasonable based on price analysis proposal techniques Non-commercial modification of a commercial item. Modification funded by DoD and constitutes 5% of value of modification Sole source acquisition of $3.5M FFP effort; price determined using cost analysis They must certify that they relied on that certified cost or pricing data in the Price Negotiation 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 have had legal counsel review the cost or pricing data prior to negotiations Value of the contract or subcontract is $7.5M or less The contract or subcontract is with a small business Sole source firm fixed price contract requiring submission of cost or pricing data The Economic Price Adjustment clause for a commercial item is based on an index formulated with a contractor’s historical cost data 27.) Which contract clause is inserted in contracts that are subject to full CAS coverage? FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-1 Cost Accounting Standards Notices and Certification Certified record of all internal contractor rates and factors Confidential document identifying all potential conflicts of interest that may arise as a result of a particular contract award A statement submitted by the contractor identifying the basis of estimate for each individual cost element contained in their proposal Written description of a contractor’s cost accounting practices and procedures 29.) A cost is allowable if it is: [Determine if a cost is allowable] [Remediation Accessed: N] According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be accurate, current and complete Consistent, uniform, and reasonable Reasonable, allocable and compliant with CAS/GAAP Established, disclosed and allocated 30.) A cost is allocable if it: Results in an inequitable allocation of costs. Is distributed equally among the benefiting contracts Is incurred specifically for the contract Is reasonable and allowable Performing a quantitative analysis of the proposed cost using multivariate regression Comparing with other competitive proposals received in response to the solicitation Evaluating the conditions surrounding the procurement. In cases of National Emergency or Contingency, any cost within 50% of the IGE is considered reasonable Ensuring the proposed cost is no more than 25% greater than the last known procurement of the item 32.) When is it most appropriate to document or model a contractor’s proposal? When the value, importance, and complexity warrant Anytime you award a competitive contract When analyzing multiple commercial supply proposals Whenever there are values in excess of $1M included in the proposal 33.) When is it most appropriate to document or model a contractor’s proposal? [Identify the required cost elements in FAR Table 15-2] [Remediation Accessed: N] When the value, importance, and complexity warrant Anytime you award a competitive contract When analyzing multiple commercial supply proposals Whenever there are values in excess of $1M included in the proposal 34.) The cost accounting systems that are used by a contractor manufacturing a number of identical units for multiple customers are: [Identify the two commonly used systems for cost accounting] [Remediation Accessed: N] Process Cost System Job Order Accounting Cost Accounting Standards Generally Accepted Accounting Practice 35.) The purpose of an audit is to: Determine if the data is accurate and complete All of these are correct Determine the degree of compliance with established procedures Verify transaction legality By mail All of these are correct By e-mail By telephone call 37.) 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 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 The purchase of 104 motor assemblies needed to manufacture a product 38.) Which of the following is true about analyzing summary cost estimates? Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique The effects of price inflation are not considered in determining if direct comparisons were properly developed and applied If a summary level estimate is as good as a detailed analysis, it is still required to use a detailed analysis As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases 39.) Identify when cost analysis is required. On all proposals exceeding the Simplified Acquisition Threshold To evaluate each individual proposal cost element including FCCOM and profit or fee Whenever a cost proposal is received To evaluate the reasonableness of individual cost elements when certified cost or pricing data are required 40.) Identify the correct definition of “Cost Realism Analysis.” The review of a proposal to ensure the contractor has properly documented adherence to their approved estimating system guidelines 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 process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement 41.) 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 42.) Which sampling technique is used to focus on high-value items? Nonprobability Stratified Random Cluster 43.) Which of the following is an effective use of stratified sampling? Analyzing 10% of the items selected randomly Analyzing the items that make up 80% of the total material cost and 10% of the remaining items Analyzing 20% of the items that are under $25,000 Analyzing 100% of the items 44.) When material prices may vary significantly from current inventory values, which estimating method should be used? [Evaluate the reasonableness of unit cost estimates] [Remediation Accessed: N] Historical Quotes Long Term Agreement Pricing Inventory Pricing Current Quotes Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations Developing a price negotiation objective for labor costs 46.) When given a set of data that appears to contain outliers, which measure of central tendency is most appropriate to use? [Differentiate between the measures of central tendency and the methods for measuring dispersion] [Remediation Accessed: N] Mean Coefficient of Determination Median Mode The coefficient of variation is unknown The population standard deviation is not generally known Other methods of central tendency are not reliable The sample mean is used to derive the significance level 48.) How do you apply the decrement factor if you find that the contractor appears to have overestimated the proposal price? [Identify the process for using stratified sampling] [Remediation Accessed: N] Multiply the decrement factor by the total cost of all sampled items Increase the government objective by the decrement factor Decrease the government objective by the decrement factor Divide the decrement factor from all sampled items 17 16 17.5 18 Use a stratified sampling techniques to evaluate contractor’s labor hour estimate Decrement labor hours estimate according to DCAA standard decrement Compare proposed hours with a Government should-cost estimate Examine proposed hours on other contracts from the same contractor 51.) 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 unique item, and there is no historical data available (i.e., detailed drawings, bill of materials, firm specifications). 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. 52.) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal. [Identify proposed direct labor mix] [Remediation Accessed: N] Is the proposed skill mix reasonable for the work required? 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? Position description Position class Direct labor position Position classification plan Position description Position class Direct labor position Position classification plan An offer of $800,000 for an item from the only known source of an electronic system unique to Government requirements An offer of $525,000 for a catalog-priced commercial item A single-source offer for $96,000 for Research and Development 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. Analyzing Contract Costs Exam (contains 18 questions) • Here is your test result.The dots represent the choices you have made. • The highlighted questions are the questions you have missed. • Remediation Accessed shows whether you accessed those links.'N' represents links not visited and 'Y' represents visited links. 1.) Which of the following is an indirect cost pool? Assembly labor Direct material Manufacturing labor General and Administrative Expenses Allocation Base multiplied by Expense Pool Overhead Rate multiplied by Allocation Base Allocation Base divided by Expense Pool Expense Pool divided by Allocation Base Segmented regression Local regression Curvilinear regression Simple linear regression Fully automated assembly line Production facility specializing in “one-off” or unique item production Fabrication plant that generates 100,000 units per month Assembly line with high proportion of manual labor 5.) Which of the following is a factor that affects profit/fee calculations? Magnitude of the contract in dollars Distribution of equipment percentage Profit/fee percentage historically paid to contractor Contract type 6.) When is the working capital adjustment used while calculating profit/fee? On all fixed price contracts On all fixed price contracts with financing On all fixed price contracts with performance based payments On all fixed price contracts with progress payments Anytime a sole-source contract is awarded Anytime a cost reimbursement contract is awarded Contractor receives a CAS covered contract or a subcontract valued at $50M in a cost accounting period Contractor receives a contract valued at $7.5M or greater 8.) A contractor incurs a cost which is determined to be unallowable. Other costs which would not have been [Remediation Indirect costs with are unallowable Directly associated costs which are allowable Indirect costs which will be allocated on the basis of benefits received Directly associated costs and are also unallowable There is no argument as the proposed costs are clearly allowable The government assumes no presumption of reasonableness to the incurrence of costs by a contractor The proposed costs are considered reasonable unless the Government can prove otherwise Irrefutable proof of actual costs shall be accepted by the Government as reasonable Basis for establishing proposed profit or fee Forecasts for any planned facility capital improvements Data showing that adequate price competition for acquisitions exceeding the TINA threshold was obtained Documentation of agreed to procedures for validating each basis of estimate 11.) The two cost accounting systems that are used by a contractor manufacturing a number of specifically identifiable physical units and whose [Identify the two commonly used systems for cost accounting] [Remediation Accessed: N] Job Order Accounting Generally Accepted Accounting Practice Process Cost System Cost Accounting Standards By mail By e-mail By telephone call All of these are correct 13.) Which inventory pricing method is being used when a company recalculates inventory prices every time a new item is added to the inventory? [Evaluate the reasonableness of unit cost estimates] [Remediation Accessed: N] Last In/First Out (LIFO) Standard Cost Moving Average Weighted Average 14.) A measure of the amount of dispersion, or distance, between data points is the: [Differentiate between the measures of central tendency and the methods for measuring dispersion] [Remediation Accessed: N] Standard Deviation Relative dispersion Coefficient of variation Absolute dispersion 15.) Identify the first step in conducting stratified sampling. Identify items for 100% analysis Develop the decrement factor Group like items together Randomly select a sample size equal to 20% of the total number of items 16.) Which of the following labor categories in a contractor’s proposal for Grounds Maintenance would raise concern? [Identify proposed direct labor mix] [Remediation Accessed: N] Quality control manager Millwright Project manager Maintenance technician Fabrication Engineering Quality Control Assembly Costs that will benefit the proposed contract as well as other contracts currently in progress Costs that can be identified with a specific contract and which the offeror does not treat as a direct material cost or a direct labor cost Costs that have already been charged as direct material costs and direct labor costs for the same task Costs that can be identified with a specific contract and which the offeror treats as a direct material cost but not a direct labor cost Analyzing Contract Costs Exam (contains 8 questions) • Here is your test result.The dots represent the choices you have made. • The highlighted questions are the questions you have missed. • Remediation Accessed shows whether you accessed those links.'N' represents links not visited and 'Y' represents visited links. Overhead Rate multiplied by Allocation Base Expense Pool divided by Allocation Base Allocation Base multiplied by Expense Pool Allocation Base divided by Expense Pool 2.) Which of the following situations would require a Disclosure Statement? 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 sole-source contract is awarded Anytime a cost reimbursement contract is awarded 3.) A cost is allowable if it is: Established, disclosed and allocated Consistent, uniform, and reasonable Reasonable, allocable and compliant with CAS/GAAP According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be accurate, current and complete Evaluating the conditions surrounding the procurement. In cases of National Emergency or Contingency, any cost within 50% of the IGE is considered reasonable Performing a quantitative analysis of the proposed cost using multivariate regression Ensuring the proposed cost is no more than 25% greater than the last known procurement of the item Comparing with other competitive proposals received in response to the solicitation Weighted Average Last In/First Out (LIFO) Moving Average Standard Cost 6.) Which of the following labor categories in a contractor’s proposal for Grounds Maintenance would raise concern? [Identify proposed direct labor mix] [Remediation Accessed: N] Project manager Quality control manager Maintenance technician Millwright Assembly Engineering Quality Control Fabrication 8.) Which one of the choices below is the correct definition of other direct costs? Costs that have already been charged as direct material costs and direct labor costs for the same task Costs that can be identified with a specific contract and which the offeror does not treat as a direct material cost or a direct labor cost Costs that will benefit the proposed contract as well as other contracts currently in progress Costs that can be identified with a specific contract and which the offeror treats as a direct material cost but not a direct labor cost Analyzing Contract Costs Exam (contains 3 questions) • Here is your test result.The dots represent the choices you have made. • The highlighted questions are the questions you have missed. • Remediation Accessed shows whether you accessed those links.'N' represents links not visited and 'Y' represents visited links. 1.) Identify the formula for calculating indirect cost rates. Allocation Base multiplied by Expense Pool Expense Pool divided by Allocation Base Overhead Rate multiplied by Allocation Base Allocation Base divided by Expense Pool Is the proposed skill mix identical to the independent government estimate? Does the contractor compensate their employees for unpaid overtime? Is the proposed skill mix reasonable for the work required? Does the contractor currently employ workers in all proposed labor categories? 3.) Which of the following is a grouping of all positions that share the same title and pay Position description Position class Direct labor position Position classification plan