ENGV 380 QUIZ 2 – COSTS AND ENGINEERING ESTIMATES | COMPLETE] QUESTIONS AND
ANSWERS ALREADY GRADED A+| 100% VERIFIED SOLUTIONS | LIBERTY UNIVERSITY
2026………...
Core Domains
Cost Estimation Fundamentals
Cost Behavior and Analysis
Engineering Economic Analysis
Project Budgeting and Control
Regulatory and Legal Compliance
Ethics and Professional Standards
Risk Management in Costing
Value Engineering and Analysis
Introduction
This examination assesses the comprehensive knowledge and analytical skills required for effective
cost estimation and engineering economic decision-making. The assessment covers foundational
theory, applied professional practices, and critical regulatory and ethical standards. Through a
series of multiple-choice and scenario-based questions, candidates will demonstrate their ability to
apply cost principles to real-world situations. The exam emphasizes practical application, strategic
thinking, and the professional judgment necessary for accurate financial forecasting and project
control within an engineering context.
,SECTION ONE: QUESTIONS 1–100
Question 1
Which of the following best defines a "fixed cost"?
A. A cost that varies directly with the volume of production.
B. A cost that remains constant in total regardless of changes in activity level.
C. A cost that is a hybrid of fixed and variable components.
D. A one-time cost associated with starting a new project.
🟢 B. A cost that remains constant in total regardless of changes in activity level.
🔴 RATIONALE: By definition, a fixed cost does not change in total when the level of production
or activity changes within a relevant range.
Question 2
A company is estimating the cost of a new software development project. The estimated effort is
500 person-months. If the average fully burdened cost per person-month is $12,000, what is the
total estimated labor cost?
A. $5,000,000
B. $6,000,000
C. $5,500,000
D. $6,500,000
🟢 B. $6,000,000
,🔴 RATIONALE: The total estimated labor cost is calculated by multiplying the effort (500
person-months) by the cost per person-month ($12,000), which equals $6,000,000.
Question 3
In the context of cost estimation, what is "sunk cost"?
A. A cost that has already been incurred and cannot be recovered.
B. A cost that will be incurred in the future.
C. The cost of the next best alternative that is forgone.
D. A cost that is directly attributable to a specific project.
🟢 A. A cost that has already been incurred and cannot be recovered.
🔴 RATIONALE: A sunk cost is a past cost that is irrelevant to future decision-making because it
cannot be changed or recovered.
Question 4
Which estimation technique is characterized by using historical data from similar past projects to
predict the cost of a new project?
A. Bottom-up estimating
B. Parametric estimating
C. Analogous estimating
D. Three-point estimating
🟢 C. Analogous estimating
, 🔴 RATIONALE: Analogous estimating, also known as top-down estimating, uses the actual cost
of previous, similar projects as the basis for estimating the cost of the current project.
Question 5
A project manager is analyzing a potential project. The initial investment is $500,000. The project
is expected to generate annual cash inflows of $120,000 for five years. What is the payback
period?
A. 3.5 years
B. 4.0 years
C. 4.17 years
D. 5.0 years
🟢 C. 4.17 years
🔴 RATIONALE: The payback period is calculated by dividing the initial investment by the annual
cash inflow: $500,000 / $120,000 = 4.17 years.
Question 6
What is the primary purpose of a cost baseline in project management?
A. To document the initial project budget before any changes.
B. To serve as a time-phased budget used to measure and monitor cost performance.
C. To estimate the total cost of ownership for a product.
D. To track the direct costs associated with labor and materials.
🟢 B. To serve as a time-phased budget used to measure and monitor cost performance.
ANSWERS ALREADY GRADED A+| 100% VERIFIED SOLUTIONS | LIBERTY UNIVERSITY
2026………...
Core Domains
Cost Estimation Fundamentals
Cost Behavior and Analysis
Engineering Economic Analysis
Project Budgeting and Control
Regulatory and Legal Compliance
Ethics and Professional Standards
Risk Management in Costing
Value Engineering and Analysis
Introduction
This examination assesses the comprehensive knowledge and analytical skills required for effective
cost estimation and engineering economic decision-making. The assessment covers foundational
theory, applied professional practices, and critical regulatory and ethical standards. Through a
series of multiple-choice and scenario-based questions, candidates will demonstrate their ability to
apply cost principles to real-world situations. The exam emphasizes practical application, strategic
thinking, and the professional judgment necessary for accurate financial forecasting and project
control within an engineering context.
,SECTION ONE: QUESTIONS 1–100
Question 1
Which of the following best defines a "fixed cost"?
A. A cost that varies directly with the volume of production.
B. A cost that remains constant in total regardless of changes in activity level.
C. A cost that is a hybrid of fixed and variable components.
D. A one-time cost associated with starting a new project.
🟢 B. A cost that remains constant in total regardless of changes in activity level.
🔴 RATIONALE: By definition, a fixed cost does not change in total when the level of production
or activity changes within a relevant range.
Question 2
A company is estimating the cost of a new software development project. The estimated effort is
500 person-months. If the average fully burdened cost per person-month is $12,000, what is the
total estimated labor cost?
A. $5,000,000
B. $6,000,000
C. $5,500,000
D. $6,500,000
🟢 B. $6,000,000
,🔴 RATIONALE: The total estimated labor cost is calculated by multiplying the effort (500
person-months) by the cost per person-month ($12,000), which equals $6,000,000.
Question 3
In the context of cost estimation, what is "sunk cost"?
A. A cost that has already been incurred and cannot be recovered.
B. A cost that will be incurred in the future.
C. The cost of the next best alternative that is forgone.
D. A cost that is directly attributable to a specific project.
🟢 A. A cost that has already been incurred and cannot be recovered.
🔴 RATIONALE: A sunk cost is a past cost that is irrelevant to future decision-making because it
cannot be changed or recovered.
Question 4
Which estimation technique is characterized by using historical data from similar past projects to
predict the cost of a new project?
A. Bottom-up estimating
B. Parametric estimating
C. Analogous estimating
D. Three-point estimating
🟢 C. Analogous estimating
, 🔴 RATIONALE: Analogous estimating, also known as top-down estimating, uses the actual cost
of previous, similar projects as the basis for estimating the cost of the current project.
Question 5
A project manager is analyzing a potential project. The initial investment is $500,000. The project
is expected to generate annual cash inflows of $120,000 for five years. What is the payback
period?
A. 3.5 years
B. 4.0 years
C. 4.17 years
D. 5.0 years
🟢 C. 4.17 years
🔴 RATIONALE: The payback period is calculated by dividing the initial investment by the annual
cash inflow: $500,000 / $120,000 = 4.17 years.
Question 6
What is the primary purpose of a cost baseline in project management?
A. To document the initial project budget before any changes.
B. To serve as a time-phased budget used to measure and monitor cost performance.
C. To estimate the total cost of ownership for a product.
D. To track the direct costs associated with labor and materials.
🟢 B. To serve as a time-phased budget used to measure and monitor cost performance.
