Analyzing Contract Costs clc 056 Exam ALL ANSWERS 100% CORRECT GUARANTEED GRADE A+

1) Which of the following types of costs might be found both as direct costs and indirect costs, depending on the circumstance? [Recognize concerns that affect the other direct costs proposed] Travel Direct Material G&A Overhead Utilities 2) Which of these statements below is correct regarding the criteria for classifying a special test equipment cost as an "other direct cost”? [Determine if the other direct costs are properly proposed] Engineered, designed, fabricated, or modified to meet specific contract needs and cannot be used for other contracts 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 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 3) Which of the following is an indirect cost pool? [Identify indirect cost pools and bases] General and Administrative Expenses Direct material Assembly labor Manufacturing labor 4) What two costs elements are required to calculate an indirect cost rate? [Identify the process of calculating indirect cost rates] Expense pool and Allocation base Overhead rate and Expense base Allocation Pool and Expense base Allocation base and Overhead rate 5) Which of the following is a phase in the allocation cycle? [Identify the cost allocation cycle] Final Allocation Phase Interim Processing Phase Adjustment on Rates Phase Continuous Rate Application Phase 6) How is simple linear regression used? [Identify what regression analysis is] [Remediation Accessed :N] To make predictions about one dependent variable based on one independent variable To make predictions about one dependent variable based on more than one independent variable To calculate an estimate that demonstrates the most likely average value based on the data supplied To ensure contractor’s estimates properly capture the reduction of labor costs associated with repetitive production tasks 7) Which regression method assumes a linear relationship between the dependent and independent variables? [Identify the different regression analysis methods] Simple linear regression Local regression Segmented regression Curvilinear regression 8) Identify the situation where you would use simple linear regression. [Identify contract pricing situations where simple regression analysis should be considered] Indirect cost rate analysis Labor classification analysis Facilities Capital Cost of Money calculation Profit objective calculation 9) After completing the five-step Least-Best-Squares-Fit (LBSF) process in developing a regression equation, you must evaluate which two aspects of the equation? [Identify the steps for using simple regression analysis] [Remediation Accessed :N] "Goodness" of the fit and statistical significance Coefficient of determination and the median Prediction interval and significance level Standard error of the estimate and the mean 10) Which situation below would you use improvement curve analysis to evaluate proposed costs? [Identify situations where improvement curve analysis would be appropriate] Assembly line with high proportion of manual labor Fully automated assembly line Production facility specializing in “one-off” or unique item production Fabrication plant that generates 100,000 units per month 11) What is the first step in conducting improvement curve analysis? [Identify the steps for using improvement curve analysis] Collect the historical data Calculate the rate of improvement Calculate the slope of the curve Determine the Theoretical value of unit #1 12) 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% [Calculate an objective using improvement curve analysis] 108 12 16 144 13) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? [Recognize elements affecting facilities capital cost of money] [Remediation Accessed :N] Divided into the FCCOM total amount Treasury rate is not used in calculating FCCOM Multiplied by the FCCOM total amount Divided by the Weighted Guidelines profit objective 14) Which of the following statements is true concerning profit/fee calculations? [Identify the factors affecting profit/fee analysis] Profit/fee objectives are a product of risk Profit/fee is calculated differently depending on DPAS rating of the contract Profit/fee objectives are reduced by the cost efficiency factor Profit/Fee is calculated once for the basic contract and must not be recalculated on subsequent modifications 15) When is the working capital adjustment used while calculating profit/fee? [Calculate a profit/fee using the appropriate structured approach] On all fixed price contracts with progress payments On all fixed price contracts On all fixed price contracts with financing On all fixed price contracts with performance based payments 16) 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? [– Develop a pre- negotiation position for profit or fee that is fair and reasonable.] Total costs Subtotal of costs Total price Direct and Indirect costs 17) Which of the following factors is critical to a successful negotiation? [Identify factors that contribute to success in any negotiation] Effectively prepare, plan, and communicate Avoid being too friendly, in case the negotiations get difficult Set your opening position extremely low to give room to negotiate The negotiation should be competitive 18) 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? [Identify key terms involved during a contract negotiation] Win-Win Win-Lose Lose-Lose Win-Lose-Win 19) What is an important driver to a successful negotiation? [Identify the importance of understanding cost drivers to ensure a successful outcome] Listen to understand Ensure your position is heard Maintain position of power Obtain the lowest price for the government 20) Which of the following is the best strategy to mitigate cost risk? [Identify strategies to mitigate cost risk] Conduct adequate market research prior to entering negotiations Rely on the contractor’s proposed costs, supported by anecdotal data provided by the contractor Evaluate other contract actions awarded to the contractor you’re negotiating with Establish a firm profit/fee percentage prior to entering negotiations