AACE CCT Primer UPDATED ACTUAL
Exam Questions And CORRECT Answers
The sum of the practices and processes that an enterprise uses to manage the total life cycle cost
investment in its portfolio of strategic assets is called _________ - CORRECT ANSWER -
Total Cost Management
______ is the application of scientific principles and techniques to problems of :
- estimation
- cost control
- business planning & management science
- profitability analysis
- project management
- planning & scheduling - CORRECT ANSWER - Cost Engineering
_______ Is the value of an activity or asset. Generally, this value is determined by the cost of the
resources that are expended to complete the activity or produce the asset. An example would be
the facilities needed to produce an activity or asset, which would include the tooling, electricity,
taxes, and maintenance, etc., necessary to keep the facility available for use. Other costs might be
office supplies, communication costs, travel costs, and security costs - CORRECT
ANSWER - Cost
Any consumable, except time, required to accomplish an activity are considered _______. From
a total cost and asset management perspective, _______ may include any real or potential
investment in strategic assets including time, monetary, human, and physical. - CORRECT
ANSWER - Resources, Resources
A resource becomes a cost when it is ______ or consumed in an _____or project - CORRECT
ANSWER - invested, project
Material, labor, and "other" are categories of _________. - CORRECT ANSWER -
Resources
,The product lifecycle is the complete history of a product through its ______, definition,
production, operation, and obsolescence /______ phases. - CORRECT ANSWER -
concept, disposal
The distinction between product life cycle and project life cycle is that the latter does not include
the ______ and ______. - CORRECT ANSWER - operation, disposal
___________ is the systematic numeric method of classifying various categories of costs for
accounting purposes - CORRECT ANSWER - Code of Accounts
______ is used used in situations where each job is different and is performed to the customer's
specifications. ______ involves keeping an account of direct costs (labor, machine time, raw
materials) and indirect costs (overheads) - CORRECT ANSWER - Job Costing, Job
Costing
A process is a sequence or independent & linked procedures which ___________ to convert
inputs into outputs. These outputs then serve as inputs for the next stage until a known goal or
end result is reached - CORRECT ANSWER - consume resources
A _____ is a good, idea, method, information, object, service, etc, that is the end result of a
process & serves as a need or want satisfierProduct - CORRECT ANSWER - Product
Product manufactured along with a different product, in a process in which both are required in
the production of another product are considered _____ - CORRECT ANSWER - Co-
products
A key feature of a ____ is that it has low value in comparison with the principal product(s) &
may be discarded or sold - CORRECT ANSWER - by-product
Types of Manufacturing Operations include _____, ______ run and _____ shop - CORRECT
ANSWER - Process, Batch, Job
,This manufacturing operation runs almost continuously making the same thing. Examples are
refining and chemical plants, and very long run assembly operations. - CORRECT
ANSWER - Process
A ______ characterized by setting up for one product, producing a set quantity of product, and
then shutting down to change over to producing another product. - CORRECT ANSWER -
Batch Run
A _______ Similar to a batch run operation, except that you only produce 1 of the item. Each job
results in a customized product. Examples are metal fabrication, prototype, fabrication. -
CORRECT ANSWER - job shop
Roles such as executive/senior management, legal, HR, business development, etc. These roles
are the farthest removed from the actual production of discrete product at the various facilities.
They are shared across many production locations and considered ______. - CORRECT
ANSWER - overhead
______ are field/plant support personnel, located at the site. These resources help the operation
run smoothly. These are people like local payroll, facility maintenance, site project controls, site
senior (office-based) supervisors and management who are shared across the various products
the particular location produces. - CORRECT ANSWER - Indirects
_______are the remote location people directly involved in producing the product. These are the
easiest to correlate their effort to a particular product. First line supervisors are also normally
considered ______. - CORRECT ANSWER - Directs
The owner approaches cost from a _____ point of view. Owners not only consider the cost of the
construction, or process, but ______ supervision
and overhead, implementation costs, cost of money, furniture, fixtures, equipment( FFE) and
other considerations - CORRECT ANSWER - holistic, internal
, Contractors, subcontractors, suppliers only consider their part of the _______ and are responsible
for that alone. - CORRECT ANSWER - Project costs
Appraising or estimating the worth of something having economic or monetary value is the
general description of ________. - CORRECT ANSWER - valuation
Valuation in _______ is the determination of the worth of the asset or that which has been
damaged or lost - CORRECT ANSWER - insurance, insured
Valuation in ________ is the determination of the dutiable value of imports by the customs
authorities. - CORRECT ANSWER - International Trade
A(n) _________ represents the foregone benefit by choosing one alternative over another -
CORRECT ANSWER - Opportunity cost
There is a relationship between time and the opportunity to influence a projects cost. The more
time that has elapsed, the ____ the chance to alter the cost. It is important to make the cost
effective decisions ______ in a project or process to have the most influence on cost. -
CORRECT ANSWER - less, early
________focuses on external reporting. Maintain the balance sheet (assets and liabilities) and
generate income (revenues less expenses) and tax statements for the organization _________.
Only look at indirects costs as a whole, not broken out to individual products or departments. -
CORRECT ANSWER - Managerial Accounting, as a whole
In cost accounting the focus is on ___________, and their product is often proprietary.
Determine how much it is costing the organization to produce a particular product. Looks at
appropriate allocation of overhead and indirect costs to only include those ______ to the product.
- CORRECT ANSWER - internal reporting, directly applicable
Impact of "One Size Fits All" Allocation - CORRECT ANSWER - Easy to come up with
and ensure 100% allocation of the overhead costs, usually don't reflect what is truly needed to
Exam Questions And CORRECT Answers
The sum of the practices and processes that an enterprise uses to manage the total life cycle cost
investment in its portfolio of strategic assets is called _________ - CORRECT ANSWER -
Total Cost Management
______ is the application of scientific principles and techniques to problems of :
- estimation
- cost control
- business planning & management science
- profitability analysis
- project management
- planning & scheduling - CORRECT ANSWER - Cost Engineering
_______ Is the value of an activity or asset. Generally, this value is determined by the cost of the
resources that are expended to complete the activity or produce the asset. An example would be
the facilities needed to produce an activity or asset, which would include the tooling, electricity,
taxes, and maintenance, etc., necessary to keep the facility available for use. Other costs might be
office supplies, communication costs, travel costs, and security costs - CORRECT
ANSWER - Cost
Any consumable, except time, required to accomplish an activity are considered _______. From
a total cost and asset management perspective, _______ may include any real or potential
investment in strategic assets including time, monetary, human, and physical. - CORRECT
ANSWER - Resources, Resources
A resource becomes a cost when it is ______ or consumed in an _____or project - CORRECT
ANSWER - invested, project
Material, labor, and "other" are categories of _________. - CORRECT ANSWER -
Resources
,The product lifecycle is the complete history of a product through its ______, definition,
production, operation, and obsolescence /______ phases. - CORRECT ANSWER -
concept, disposal
The distinction between product life cycle and project life cycle is that the latter does not include
the ______ and ______. - CORRECT ANSWER - operation, disposal
___________ is the systematic numeric method of classifying various categories of costs for
accounting purposes - CORRECT ANSWER - Code of Accounts
______ is used used in situations where each job is different and is performed to the customer's
specifications. ______ involves keeping an account of direct costs (labor, machine time, raw
materials) and indirect costs (overheads) - CORRECT ANSWER - Job Costing, Job
Costing
A process is a sequence or independent & linked procedures which ___________ to convert
inputs into outputs. These outputs then serve as inputs for the next stage until a known goal or
end result is reached - CORRECT ANSWER - consume resources
A _____ is a good, idea, method, information, object, service, etc, that is the end result of a
process & serves as a need or want satisfierProduct - CORRECT ANSWER - Product
Product manufactured along with a different product, in a process in which both are required in
the production of another product are considered _____ - CORRECT ANSWER - Co-
products
A key feature of a ____ is that it has low value in comparison with the principal product(s) &
may be discarded or sold - CORRECT ANSWER - by-product
Types of Manufacturing Operations include _____, ______ run and _____ shop - CORRECT
ANSWER - Process, Batch, Job
,This manufacturing operation runs almost continuously making the same thing. Examples are
refining and chemical plants, and very long run assembly operations. - CORRECT
ANSWER - Process
A ______ characterized by setting up for one product, producing a set quantity of product, and
then shutting down to change over to producing another product. - CORRECT ANSWER -
Batch Run
A _______ Similar to a batch run operation, except that you only produce 1 of the item. Each job
results in a customized product. Examples are metal fabrication, prototype, fabrication. -
CORRECT ANSWER - job shop
Roles such as executive/senior management, legal, HR, business development, etc. These roles
are the farthest removed from the actual production of discrete product at the various facilities.
They are shared across many production locations and considered ______. - CORRECT
ANSWER - overhead
______ are field/plant support personnel, located at the site. These resources help the operation
run smoothly. These are people like local payroll, facility maintenance, site project controls, site
senior (office-based) supervisors and management who are shared across the various products
the particular location produces. - CORRECT ANSWER - Indirects
_______are the remote location people directly involved in producing the product. These are the
easiest to correlate their effort to a particular product. First line supervisors are also normally
considered ______. - CORRECT ANSWER - Directs
The owner approaches cost from a _____ point of view. Owners not only consider the cost of the
construction, or process, but ______ supervision
and overhead, implementation costs, cost of money, furniture, fixtures, equipment( FFE) and
other considerations - CORRECT ANSWER - holistic, internal
, Contractors, subcontractors, suppliers only consider their part of the _______ and are responsible
for that alone. - CORRECT ANSWER - Project costs
Appraising or estimating the worth of something having economic or monetary value is the
general description of ________. - CORRECT ANSWER - valuation
Valuation in _______ is the determination of the worth of the asset or that which has been
damaged or lost - CORRECT ANSWER - insurance, insured
Valuation in ________ is the determination of the dutiable value of imports by the customs
authorities. - CORRECT ANSWER - International Trade
A(n) _________ represents the foregone benefit by choosing one alternative over another -
CORRECT ANSWER - Opportunity cost
There is a relationship between time and the opportunity to influence a projects cost. The more
time that has elapsed, the ____ the chance to alter the cost. It is important to make the cost
effective decisions ______ in a project or process to have the most influence on cost. -
CORRECT ANSWER - less, early
________focuses on external reporting. Maintain the balance sheet (assets and liabilities) and
generate income (revenues less expenses) and tax statements for the organization _________.
Only look at indirects costs as a whole, not broken out to individual products or departments. -
CORRECT ANSWER - Managerial Accounting, as a whole
In cost accounting the focus is on ___________, and their product is often proprietary.
Determine how much it is costing the organization to produce a particular product. Looks at
appropriate allocation of overhead and indirect costs to only include those ______ to the product.
- CORRECT ANSWER - internal reporting, directly applicable
Impact of "One Size Fits All" Allocation - CORRECT ANSWER - Easy to come up with
and ensure 100% allocation of the overhead costs, usually don't reflect what is truly needed to
