CLC 056 Test Questions And Answers( Complete Solution Rated A)

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Analyzing Contract Costs Exam 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. Back to Status page contains 21 Questions 1) 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 2) 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 3) 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? [Identify contract pricing situations where simple regression analysis should be considered] Mileage of all similar cars Interior color of all similar cars Body style of all similar cars Exterior color of all similar cars DAU Page 1 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 4) 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] "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 5) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? [Recognize elements affecting facilities capital cost of money] 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 6) Which of the following is a factor that affects profit/fee calculations? [Identify the factors affecting profit/fee analysis] Contract type Distribution of equipment percentage Magnitude of the contract in dollars Profit/fee percentage historically paid to contractor 7) 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 8) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] DAU Page 2 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 9) Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data? [Determine if an exception to the Truth-in-Negotiations Act applies] Prices are set by law or regulation Sole source acquisition of $3.5M FFP effort; price determined using cost analysis 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 10) Who has the authority to waive CAS applicability for a particular contract? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] The Agency Head A level above the contracting officer The Contracting Officer's Representative The Cognizant Federal Agency Official 11) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 12) 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 DAU Page 3 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 accounting] [Remediation Accessed :N] Process Cost System  Cost Accounting Standards  Generally Accepted Accounting Practice  Job Order Accounting 13) Select the item below that would likely be categorized as a Direct Material cost. [Identify the different types of material costs] The purchase of 104 motor assemblies needed to manufacture a product 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 14) Identify the objective of performing proposal analysis. [Identify the fundamentals of cost analysis] To ensure the final agreed to price is fair and reasonable To ensure the government negotiates the lowest possible price for goods and services To provide the contract negotiator the best possible profit or fee objective To gain a more complete understanding of the company’s rates and factors 15) Identify the correct definition of “Cost Realism Analysis.” [Distinguish between cost analysis, price analysis, and cost realism analysis] The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement 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 16) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] DAU Page 4 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 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 Analyzing 10% of the items selected randomly 17) 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] Moving Average Weighted Average Standard Cost Last In/First Out (LIFO) 18) 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] Standard Deviation Absolute dispersion Relative dispersion Coefficient of variation 19) Given the following data, calculate the sample median. Sample data: 17, 16, 17, 16, 17, 18, 18 [Calculate a pre-negotiation objective using the appropriate statistical analysis techniques] 17 16 17.5 18 DAU Page 5 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 20) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? [Relate proposed labor hours to work requirements to determine reasonableness of direct labor costs] Compare proposed hours with a Government should-cost estimate Examine proposed hours on other contracts from the same contractor Decrement labor hours estimate according to DCAA standard decrement Use a stratified sampling techniques to evaluate contractor’s labor hour estimate 21) Which of the following is the statutory authority for requiring certified cost or pricing data? [Select the appropriate authority for requiring an offeror to provide cost or pricing data] 10 U.S.C. 2306(a) 10 U.S.C. 2304(a) 10 U.S.C. 941(b) 10 U.S.C. 2301(b) Back to Status page DAU Page 6 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Analyzing Contract Costs Exam 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. Back to Status page contains 2 Questions 1) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 2) 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: [Identify the two commonly used systems for cost accounting] Cost Accounting Standards Generally Accepted Accounting Practice  Process Cost System  Job Order Accounting Back to Status page DAU Page 1 of 1 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Analyzing Contract Costs Exam 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. Back to Status page contains 21 Questions 1) 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 2) 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 3) 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? [Identify contract pricing situations where simple regression analysis should be considered] Mileage of all similar cars Interior color of all similar cars Body style of all similar cars Exterior color of all similar cars DAU Page 1 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 4) 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] "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 5) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? [Recognize elements affecting facilities capital cost of money] 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 6) Which of the following is a factor that affects profit/fee calculations? [Identify the factors affecting profit/fee analysis] Contract type Distribution of equipment percentage Magnitude of the contract in dollars Profit/fee percentage historically paid to contractor 7) 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 8) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] DAU Page 2 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 9) Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data? [Determine if an exception to the Truth-in-Negotiations Act applies] Prices are set by law or regulation Sole source acquisition of $3.5M FFP effort; price determined using cost analysis 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 10) Who has the authority to waive CAS applicability for a particular contract? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] The Agency Head A level above the contracting officer The Contracting Officer's Representative The Cognizant Federal Agency Official 11) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 12) 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 DAU Page 3 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 accounting] [Remediation Accessed :N] Process Cost System  Cost Accounting Standards  Generally Accepted Accounting Practice  Job Order Accounting 13) Select the item below that would likely be categorized as a Direct Material cost. [Identify the different types of material costs] The purchase of 104 motor assemblies needed to manufacture a product 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 14) Identify the objective of performing proposal analysis. [Identify the fundamentals of cost analysis] To ensure the final agreed to price is fair and reasonable To ensure the government negotiates the lowest possible price for goods and services To provide the contract negotiator the best possible profit or fee objective To gain a more complete understanding of the company’s rates and factors 15) Identify the correct definition of “Cost Realism Analysis.” [Distinguish between cost analysis, price analysis, and cost realism analysis] The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement 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 16) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] DAU Page 4 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 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 Analyzing 10% of the items selected randomly 17) 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] Moving Average Weighted Average Standard Cost Last In/First Out (LIFO) 18) 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] Standard Deviation Absolute dispersion Relative dispersion Coefficient of variation 19) Given the following data, calculate the sample median. Sample data: 17, 16, 17, 16, 17, 18, 18 [Calculate a pre-negotiation objective using the appropriate statistical analysis techniques] 17 16 17.5 18 DAU Page 5 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 20) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? [Relate proposed labor hours to work requirements to determine reasonableness of direct labor costs] Compare proposed hours with a Government should-cost estimate Examine proposed hours on other contracts from the same contractor Decrement labor hours estimate according to DCAA standard decrement Use a stratified sampling techniques to evaluate contractor’s labor hour estimate 21) Which of the following is the statutory authority for requiring certified cost or pricing data? [Select the appropriate authority for requiring an offeror to provide cost or pricing data] 10 U.S.C. 2306(a) 10 U.S.C. 2304(a) 10 U.S.C. 941(b) 10 U.S.C. 2301(b) Back to Status page DAU Page 6 of 6 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Analyzing Contract Costs Exam 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. Back to Status page contains 55 Questions 1) Which of the following must be true to properly classify a cost as an “other direct cost”? [Recognize concerns that affect the other direct costs proposed] All of these The proposed cost benefits only the proposed contract work The offeror customarily treats similar costs as “other direct costs” under similar circumstances The contractor’s accounting system segregates “other direct costs” from similar indirect costs 2) 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? [Determine if the other direct costs are properly proposed] [Remediation Accessed :N] 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 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. The travel costs are for warehouse personnel to attend OSHA training on how to safely handle hazardous materials. 3) Which of the following is an indirect cost pool? [Identify indirect cost pools and bases] General and Administrative Expenses Direct material Assembly labor DAU Page 1 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Manufacturing labor 4) Identify the formula for calculating indirect cost rates. [Identify the process of 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 5) In which of the following phases does the contractor determine actual indirect cost rates? [Identify the cost allocation cycle] [Remediation Accessed :N] Final Allocation Phase Beginning Payment Phase Forward Pricing Phase Billing Phase 6) Which of the following situations would you most likely employ linear regression techniques? [Identify what regression analysis is] 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 Calculating the mean cost of one individual unit in a production run of 10,000 units Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office 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 DAU Page 2 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 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] [Remediation Accessed :N] 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? [Identify the steps for using simple regression analysis] [Remediation Accessed :N] X Z R Y 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] Assembly line repair of a turret assembly for an M1/A2 Abrams tank Assembly of two prototype aerial refueling airplanes Fabrication of a single jet engine frame assembly Fabrication of a new aircraft carrier 11) What is the best method for determining an improvement curve slope? [Identify the steps for using improvement curve analysis] Using actual historical data Using the median percentage from similar products DAU Page 3 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Using established slopes from the Cost Estimator’s Reference Manual Using established slopes derived on recent procurements 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) Which of the following are factors used in calculating the Facilities Capital Cost of Money (FCCOM) amount? [Recognize elements affecting facilities capital cost of money] [Remediation Accessed :N] Proposal allocation base amounts Percentage of land, building, and profit distributions Company-wide allocation base amounts Division-wide 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 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] DAU Page 4 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 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 would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? [– Develop a pre-negotiation position for profit or fee that is fair and reasonable.] [Remediation Accessed :N] 10% 1% 6% 15% 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 DAU Page 5 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 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) What is the single most important decision the Contracting Officer must make to mitigate cost risk? [Identify strategies to mitigate cost risk] Selection of contract type The profit/fee percentage objective The selection of a the awardee Whether to solicit to large business, or set aside for small business only 21) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] [Remediation Accessed :N] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 22) 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?” [Identify cost analysis terms and techniques used when developing a pre-negotiation position] All of these are correct The award of any negotiated contract (except for undefinitized actions such as letter contracts DAU Page 6 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 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 The modification of any sealed bid or negotiated contract 23) What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent known as? [Identify terms associated with the Truth-in-Negotiations Act (TINA)] Defective Pricing CICA Violation Data other than cost or pricing data Exception to certified cost or pricing data 24) Which of the following is an exception to the requirement to provide certified cost or pricing data? [Determine if an exception to the Truth-in-Negotiations Act applies] [Remediation Accessed :N] Adequate price competition Repetitive buy of same or similar item where certified cost or pricing data had been provided in past When the contracting officer determines the prices agreed upon are based on identical forecasting methods utilized in the Independent Government Estimate (IGE) Proposal is less than $7.5 M 25) When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the following statements is true? [Identify the remedy to the Government in the event that a contractor submits defective data] 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 They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum They acknowledge their reliance on that cost or pricing data by signing the Price Negotiation Memorandum 26) Which of the following situations would exempt a contract or subcontract from CAS coverage? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] [Remediation Accessed :N] DAU Page 7 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 The contract or subcontract is with a small business Value of the contract or subcontract is $7.5M or less The Economic Price Adjustment clause for a commercial item is based on an index formulated with a contractor’s historical cost data Sole source firm fixed price contract requiring submission of cost or pricing data 27) Which contract clause is inserted in contracts that are subject to full CAS coverage? [Determine the level of CAS coverage that applies] [Remediation Accessed :N] FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-1 Cost Accounting Standards Notices and Certification 28) Which of the following situations would require a Disclosure Statement? [Identify the purpose of a Disclosure Statement] 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 Anytime a cost reimbursement contract is awarded Anytime a sole-source contract is awarded 29) A contractor incurs a cost which is determined to be unallowable. Other costs which would not have been incurred “but for” the incurrence of the unallowable costs are: [Determine if a cost is allowable] Directly associated costs and are also unallowable Indirect costs which will be allocated on the basis of benefits received Directly associated costs which are allowable Indirect costs with are unallowable DAU Page 8 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 30) A contractor incurs costs for raw materials to be used in two different government contracts. Is the total value of this raw material allocable to one contract? [Determine if a cost is allocable] No, material must be used and charged specifically to the benefiting contract Yes, because all the material is to be used for government contracts Yes, due to the efficiency gained by procuring all the material at one time No, raw material is always charged as an overhead expense 31) Which of the following is the best method for determining if a proposed cost is reasonable? [Determine if a cost is reasonable] Comparing with other competitive proposals received in response to the solicitation Performing a quantitative analysis of the proposed cost using multivariate regression 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) 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) [Identify the rationale for modeling a contractor’s cost proposal]  Allows real time calculation of offers and counteroffers during negotiations 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 33) When is it most appropriate to document or model a contractor’s proposal? [Identify the required cost elements in FAR Table 15-2] When the value, importance, and complexity warrant When analyzing multiple commercial supply proposals Anytime you award a competitive contract Whenever there are values in excess of $1M included in the proposal DAU Page 9 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 34) 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: [Identify the two commonly used systems for cost accounting] [Remediation Accessed :N] Generally Accepted Accounting Practice Cost Accounting Standards  Job Order Accounting Process Cost System 35) The purpose of an audit is to: [Identify situations when an audit should be requested] All of these are correct Determine if the data is accurate and complete Determine the degree of compliance with established procedures Verify transaction legality 36) How may you request an audit? [Identify the process for requesting an audit and the key players involved with the process] All of these are correct By telephone call By mail By e-mail 37) Select the item below that would be categorized as an Indirect Material cost. [Identify the different types of material costs] [Remediation Accessed :N] Washers and seals used in the assembly process for all products Marketing costs for the sale of a particular item The purchase of 104 motor assemblies needed to manufacture a product DAU Page 10 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Frames that are fabricated for each individual unit 38) Which of the following is true about analyzing summary cost estimates? [Determine the fairness and reasonableness of summary level cost estimates] Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases 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 39) Identify when cost analysis is required. [Identify the fundamentals of cost analysis] [Remediation Accessed :N] To evaluate the reasonableness of individual cost elements when certified cost or pricing data are required Whenever a cost proposal is received To evaluate each individual proposal cost element including FCCOM and profit or fee On all proposals exceeding the Simplified Acquisition Threshold 40) Identify the correct definition of “Cost Analysis.”. [Distinguish between cost analysis, price analysis, and cost realism analysis] [Remediation Accessed :N] The review and evaluation of individual cost elements and proposed profit/fee in an offeror’s proposal Factual, not judgmental, and verifiable details of a cost proposal Independent review of vendor quotes, long term agreements, and overhead costs in a proposal Analysis of “should cost” estimates compared to proposed costs 41) Which of the following is known as a “Questioned Cost”? [Identify the various types of audits] Costs on which audit action has been completed and which are not considered as acceptable as a contract cost Costs which the auditor cannot evaluate as allowable or unallowable, because there is not enough information for analysis DAU Page 11 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Costs that have not yet been evaluated Arithmetic difference between the amount proposed and the sum of the related questioned, unsupported, and unresolved amounts 42) Which sampling technique is used to focus on high-value items? [Determine the appropriateness of the offeror's cost estimating methodology] Stratified Random Cluster Nonprobability 43) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 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] Current Quotes Historical Quotes Inventory Pricing Long Term Agreement Pricing 45) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a preDAU Page 12 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 negotiation objective] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 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] Median Coefficient of Determination Mean Mode 47) Which three elements are necessary for calculating a confidence interval? [Identify the process for establishing a confidence interval] Sample mean, t-value, standard error of the mean Mean, median, and mode Variance, t-value, sample mean 48) Identify the first step in conducting stratified sampling. [Identify the process for using stratified sampling] Identify items for 100% analysis Randomly select a sample size equal to 20% of the total number of items Develop the decrement factor Group like items together DAU Page 13 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 49) Given the following data, calculate the standard deviation. Sample data: 13, 12, 9, 15, 11, 16, 17, 8, 12, 7, 12 [Calculate a pre-negotiation objective using the appropriate statistical analysis techniques] [Remediation Accessed :N] 3.19 3.05 4.12 4.21 50) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? [Relate proposed labor hours to work requirements to determine reasonableness of direct labor costs] [Remediation Accessed :N] Compare proposed hours with a Government should-cost estimate Examine proposed hours on other contracts from the same contractor Decrement labor hours estimate according to DCAA standard decrement Use a stratified sampling techniques to evaluate contractor’s labor hour estimate 51) Which of these situations warrants the use of a round-table estimate? [Examine proposed labor rates to determine a fair and reasonable pre-negotiation position] 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. 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. 52) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal. [Identify proposed direct labor mix] Is the proposed skill mix reasonable for the work required? Does the contractor currently employ workers in all proposed labor categories? Is the proposed skill mix identical to the independent government estimate? DAU Page 14 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Does the contractor compensate their employees for unpaid overtime? 53) Which of the following labor classifications most likely involves fashioning parts from raw materials or purchased materials? [Identify labor classifications] Fabrication Assembly Quality Control Engineering 54) Which of the following is a grouping of all positions that share the same title and pay level? [Identify types of other direct costs] Position class Position description Position classification plan Direct labor position 55) For which of the following procurements would you require certified cost or pricing data? [Select the appropriate authority for requiring an offeror to provide cost or pricing data] [Remediation Accessed :N] 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 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. An offer of $525,000 for a catalog-priced commercial item Back to Status page DAU Page 15 of 15 https://learn.dau.mil/Atlas2/html/testengine/TestGeneration/test_review.jsp 9/8/2017 Analyzing Contract Costs Exam • 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. Back to Status page contains 55 Questions 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] [Remediation Accessed :N] Travel Direct Material G&A Overhead Utilities 2) 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? [Determine if the other direct costs are properly proposed] [Remediation Accessed :N] 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 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. The travel costs are for warehouse personnel to attend OSHA training on how to safely handle hazardous materials. 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) Identify the formula for calculating indirect cost rates. [Identify the process of 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 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) Which of the following situations would you most likely employ linear regression techniques? [Identify what regression analysis is] [Remediation Accessed :N] 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 Calculating the mean cost of one individual unit in a production run of 10,000 units Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office 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) 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? [Identify contract pricing situations where simple regression analysis should be considered] Mileage of all similar cars Interior color of all similar cars Body style of all similar cars Exterior color of all similar cars 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] "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] [Remediation Accessed :N] 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 best method for determining an improvement curve slope? [Identify the steps for using improvement curve analysis] Using actual historical data Using the median percentage from similar products Using established slopes from the Cost Estimator’s Reference Manual Using established slopes derived on recent procurements 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) Which of the following are factors used in calculating the Facilities Capital Cost of Money (FCCOM) amount? [Recognize elements affecting facilities capital cost of money] [Remediation Accessed :N] Proposal allocation base amounts Percentage of land, building, and profit distributions Company-wide allocation base amounts Division-wide 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 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 calculating profit/fee, how is the “performance risk (composite)” calculated? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together 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 16) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? [– Develop a pre-negotiation position for profit or fee that is fair and reasonable.] [Remediation Accessed :N] 10% 1% 6% 15% 17) What is the government’s primary objective in negotiations? [Identify factors that contribute to success in any negotiation] To agree on a price that is fair and reasonable to the government and the contractor 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 ensure the agreed to price is the same, or lower, than the government’s objective 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) What is the single most important decision the Contracting Officer must make to mitigate cost risk? [Identify strategies to mitigate cost risk] [Remediation Accessed :N] Selection of contract type The profit/fee percentage objective The selection of a the awardee Whether to solicit to large business, or set aside for small business only 21) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] [Remediation Accessed :N] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 22) 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?” [Identify cost analysis terms and techniques used when developing a pre-negotiation position] All of these are correct The award of any negotiated contract (except for undefinitized actions such as letter contracts 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 The modification of any sealed bid or negotiated contract 23) What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent known as? [Identify terms associated with the Truth-inNegotiations Act (TINA)] Defective Pricing CICA Violation Data other than cost or pricing data Exception to certified cost or pricing data 24) Which of the following is an exception to the requirement to provide certified cost or pricing data? [Determine if an exception to the Truth-in-Negotiations Act applies] [Remediation Accessed :N] Adequate price competition Repetitive buy of same or similar item where certified cost or pricing data had been provided in past When the contracting officer determines the prices agreed upon are based on identical forecasting methods utilized in the Independent Government Estimate (IGE) Proposal is less than $7.5 M 25) When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the following statements is true? [Identify the remedy to the Government in the event that a contractor submits defective data] 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 They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum They acknowledge their reliance on that cost or pricing data by signing the Price Negotiation Memorandum 26) Which of the following situations would exempt a contract or subcontract from CAS coverage? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] [Remediation Accessed :N] The contract or subcontract is with a small business Value of the contract or subcontract is $7.5M or less The Economic Price Adjustment clause for a commercial item is based on an index formulated with a contractor’s historical cost data Sole source firm fixed price contract requiring submission of cost or pricing data 27) Which contract clause is inserted in contracts that are subject to full CAS coverage? [Determine the level of CAS coverage that applies] [Remediation Accessed :N] FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-1 Cost Accounting Standards Notices and Certification 28) Which of the following situations would require a Disclosure Statement? [Identify the purpose of a Disclosure Statement] [Remediation Accessed :N] 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 Anytime a cost reimbursement contract is awarded Anytime a sole-source contract is awarded 29) A contractor incurs a cost which is determined to be unallowable. Other costs which would not have been incurred “but for” the incurrence of the unallowable costs are: [Determine if a cost is allowable] [Remediation Accessed :N] Directly associated costs and are also unallowable Indirect costs which will be allocated on the basis of benefits received Directly associated costs which are allowable Indirect costs with are unallowable 30) A cost is allocable if it: [Determine if a cost is allocable] [Remediation Accessed :N] Is incurred specifically for the contract Is reasonable and allowable Is distributed equally among the benefiting contracts Results in an inequitable allocation of costs. 31) Which of the following is the best method for determining if a proposed cost is reasonable? [Determine if a cost is reasonable] Comparing with other competitive proposals received in response to the solicitation Performing a quantitative analysis of the proposed cost using multivariate regression 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? [Identify the rationale for modeling a contractor’s cost proposal] When the value, importance, and complexity warrant When analyzing multiple commercial supply proposals Anytime you award a competitive contract 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 When analyzing multiple commercial supply proposals Anytime you award a competitive contract 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] Job Order Accounting Cost Accounting Standards Process Cost System Generally Accepted Accounting Practice 35) The purpose of an audit is to: [Identify situations when an audit should be requested] All of these are correct Determine if the data is accurate and complete Determine the degree of compliance with established procedures Verify transaction legality 36) How may you request an audit? [Identify the process for requesting an audit and the key players involved with the process] All of these are correct By telephone call By mail By e-mail 37) Select the item below that would likely be categorized as a Direct Material cost. [Identify the different types of material costs] The purchase of 104 motor assemblies needed to manufacture a product 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 38) Which of the following is true about analyzing summary cost estimates? [Determine the fairness and reasonableness of summary level cost estimates] Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases 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 39) Identify when cost analysis is required. [Identify the fundamentals of cost analysis] [Remediation Accessed :N] To evaluate the reasonableness of individual cost elements when certified cost or pricing data are required Whenever a cost proposal is received To evaluate each individual proposal cost element including FCCOM and profit or fee On all proposals exceeding the Simplified Acquisition Threshold 40) Identify the correct definition of “Cost Analysis.”. [Distinguish between cost analysis, price analysis, and cost realism analysis] [Remediation Accessed :N] The review and evaluation of individual cost elements and proposed profit/fee in an offeror’s proposal Factual, not judgmental, and verifiable details of a cost proposal Independent review of vendor quotes, long term agreements, and overhead costs in a proposal Analysis of “should cost” estimates compared to proposed costs 41) Which of the following is known as a “Questioned Cost”? [Identify the various types of audits] Costs on which audit action has been completed and which are not considered as acceptable as a contract cost Costs which the auditor cannot evaluate as allowable or unallowable, because there is not enough information for analysis Costs that have not yet been evaluated Arithmetic difference between the amount proposed and the sum of the related questioned, unsupported, and unresolved amounts 42) Which sampling technique is used to focus on high-value items? [Determine the appropriateness of the offeror's cost estimating methodology] Stratified Random Cluster Nonprobability 43) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 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] Current Quotes Historical Quotes Inventory Pricing Long Term Agreement Pricing 45) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a pre-negotiation objective] [Remediation Accessed :N] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 46) 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 Absolute dispersion Relative dispersion Coefficient of variation 47) When calculating the confidence interval, why is the sample standard deviation used to derive the standard error of the mean? [Identify the process for establishing a confidence interval] [Remediation Accessed :N] The population standard deviation is not generally known The sample mean is used to derive the significance level The coefficient of variation is unknown Other methods of central tendency are not reliable 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] Multiply the decrement factor by the total cost of all sampled items Divide the decrement factor from all sampled items Increase the government objective by the decrement factor Decrease the government objective by the decrement factor 49) Given the following data, calculate the sample median. Sample data: 17, 16, 17, 16, 17, 18, 18 [Calculate a pre-negotiation objective using the appropriate statistical analysis techniques] 17 16 17.5 18 50) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? [Relate proposed labor hours to work requirements to determine reasonableness of direct labor costs] Compare proposed hours with a Government should-cost estimate Examine proposed hours on other contracts from the same contractor Decrement labor hours estimate according to DCAA standard decrement Use a stratified sampling techniques to evaluate contractor’s labor hour estimate 51) Which of these situations warrants the use of a round-table estimate? [Examine proposed labor rates to determine a fair and reasonable pre-negotiation position] 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. 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. 52) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal. [Identify proposed direct labor mix] Is the proposed skill mix reasonable for the work required? Does the contractor currently employ workers in all proposed labor categories? Is the proposed skill mix identical to the independent government estimate? Does the contractor compensate their employees for unpaid overtime? 53) Which of the following labor classifications most likely involves fashioning parts from raw materials or purchased materials? [Identify labor classifications] Fabrication Assembly Quality Control Engineering 54) Which of the following is a grouping of all positions that share the same title and pay level? [Identify types of other direct costs] Position class Position description Position classification plan Direct labor position 55) Which of the following is the statutory authority for requiring certified cost or pricing data? [Select the appropriate authority for requiring an offeror to provide cost or pricing data] 10 U.S.C. 2306(a) 10 U.S.C. 2304(a) 10 U.S.C. 941(b) 10 U.S.C. 2301(b) DAU Training CBULLOCK123 Fordbigblue$1975 https://identity.dau.mil or Contains 55 Questions (Attempt=1/99) Analyzing Contract Costs Exam 1) Which regression method assumes a linear relationship between the dependent and independent variables? Segmented regression Simple linear regression pg-1237 Local regression Curvilinear regression 2) 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 The modification of any sealed bid or negotiated contract The award of any negotiated contract (except for undefinitized actions such as letter contracts All of these are correct 3) Identify the formula for calculating indirect cost rates. Expense Pool divided by Allocation Base pg-1120 Allocation Base multiplied by Expense Pool Allocation Base divided by Expense Pool Overhead Rate multiplied by Allocation Base 4) What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent known as? Defective Pricing PG-226 Data other than cost or pricing data Exception to certified cost or pricing data CICA Violation 5) Which of the following situations would require a Disclosure Statement? Contractor receives a CAS covered contract or a subcontract valued at $50M in a cost accounting period Anytime a cost reimbursement contract is awarded Contractor receives a contract valued at $7.5M or greater PG-250 Anytime a sole-source contract is awarded 6) What is the government’s primary objective in negotiations? To establish a profit/fee percentage that is in line with previous contracts with the particular contractor To agree on a price that is fair and reasonable to the government and the contractor Pg-47?? To agree on each element of cost with the contractor To ensure the agreed to price is the same, or lower, than the government’s objective 7) Which of the following is a phase in the allocation cycle? PG-1125 Adjustment on Rates Phase Interim Processing Phase Final Allocation Phase Continuous Rate Application Phase 8) Which of the following is a grouping of all positions that share the same title and pay level? PG-943 Position classification plan Position class Direct labor position Position description 9) What is an important driver to a successful negotiation? PG-1515 Maintain position of power Obtain the lowest price for the government Ensure your position is heard Listen to understand 10) The purpose of an audit is to: All of these are correct Determine if the data is accurate and complete Verify transaction legality Determine the degree of compliance with established procedures 11) 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 ?? Washers and seals used in the assembly process for all products Extra material or items that are left over from the contract and cannot be used 12) 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 13) Which contract clause is inserted in contracts that are subject to full CAS coverage? FAR 52.230-1 Cost Accounting Standards Notices and Certification ??? FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices 14) Which situation below would you use improvement curve analysis to evaluate proposed costs? 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 15) Which of the following types of costs might be found both as direct costs and indirect costs, depending on the circumstance? Travel Direct Material Utilities G&A Overhead PG-1164 16) Each Price Negotiation Memorandum must contain which of the following? Statement that the FAR was consistently followed Statement that the price is fair and reasonable Signature of the Contract Specialist PG-1508 Signature of the Legal Counsel 17) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? 1% 6% 15% PG-1450 10% 18) How may you request an audit? By mail By telephone call All of these are correct PG546 By e-mail 19) Which of the following is the best method for determining if a proposed cost is reasonable? 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 20) Which of the following situations would you most likely employ linear regression techniques? Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office PG 1360 Analyzing the accuracy of a should-cost analysis generated by a DCMA Industrial Engineer 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 21) What is the single most important decision the Contracting Officer must make to mitigate cost risk? The selection of a the awardee The profit/fee percentage objective Whether to solicit to large business, or set aside for small business only Selection of contract type 22) Identify the correct definition of “Cost Analysis.”. The review and evaluation of individual cost elements and proposed profit/fee in an offeror’s proposal Analysis of “should cost” estimates compared to proposed costs Independent review of vendor quotes, long term agreements, and overhead costs in a proposal Factual, not judgmental, and verifiable details of a cost proposal PG-173 23) Which of the following is the statutory authority for requiring certified cost or pricing data? 10 U.S.C. 941(b) 10 U.S.C. 2304(a) 10 U.S.C. 2306(a) Internet 10 U.S.C. 2301(b) 24) 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 16 108 PG 1373 144 25) Which of the following statements is true concerning profit/fee calculations? Profit/fee objectives are a product of risk Profit/fee objectives are reduced by the cost efficiency factor PG-1487 Profit/Fee is calculated once for the basic contract and must not be recalculated on subsequent modifications Profit/fee is calculated differently depending on DPAS rating of the contract 26) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal. Does the contractor compensate their employees for unpaid overtime? Is the proposed skill mix identical to the independent government estimate? Is the proposed skill mix reasonable for the work required? PG-940 Does the contractor currently employ workers in all proposed labor categories? 27) A cost is allocable if it: Is reasonable and allowable PG-239 Results in an inequitable allocation of costs. Is distributed equally among the benefiting contracts Is incurred specifically for the contract 28) Which of the following is true about analyzing summary cost estimates? If a summary level estimate is as good as a detailed analysis, it is still required to use a detailed analysis The effects of price inflation are not considered in determining if direct comparisons were properly developed and applied Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique PG-665 As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases 29) When is it most appropriate to document or model a contractor’s proposal? Anytime you award a competitive contract ? When the value, importance, and complexity warrant When analyzing multiple commercial supply proposals Whenever there are values in excess of $1M included in the proposal 30) 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 ? Whenever there are values in excess of $1M included in the proposal When analyzing multiple commercial supply proposals 31) Which of the following is an exception to the requirement to provide certified cost or pricing data? Repetitive buy of same or similar item where certified cost or pricing data had been provided in past PG 356 Proposal is less than $7.5 M Adequate price competition When the contracting officer determines the prices agreed upon are based on identical forecasting methods utilized in the Independent Government Estimate (IGE) 32) 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 33) Which of the following is known as a “Questioned Cost”? Arithmetic difference between the amount proposed and the sum of the related questioned, unsupported, and unresolved amounts Costs on which audit action has been completed and which are not considered as acceptable as a contract cost PG 559 Costs which the auditor cannot evaluate as allowable or unallowable, because there is not enough information for analysis Costs that have not yet been evaluated 34) 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 population standard deviation is not generally known The sample mean is used to derive the significance level PG-848 35) 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 the items that make up 80% of the total material cost and 10% of the remaining items Analyzing 100% of the items PG-874 36) What is the best method for determining an improvement curve slope? Using actual historical data PG-1387 Using the median percentage from similar products Using established slopes from the Cost Estimator’s Reference Manual Using established slopes derived on recent procurements 37) A measure of the amount of dispersion, or distance, between data points is the: Absolute dispersion Relative dispersion Standard Deviation Coefficient of variation 833 38) Which sampling technique is used to focus on high-value items? Nonprobability Stratified 695 Random Cluster 39) 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 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. 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. 40) The cost accounting systems that are used by a contractor manufacturing a number of identical units for multiple customers are: Job Order Accounting Generally Accepted Accounting Practice Process Cost System Cost Accounting Standards 41) Which of the following are factors used in calculating the Facilities Capital Cost of Money (FCCOM) amount? Percentage of land, building, and profit distributions Division-wide allocation base amounts Company-wide allocation base amounts 1915 Proposal allocation base amounts 42) When calculating profit/fee, how is the “performance risk (composite)” calculated? By multiplying the assigned values of the technical and management/cost control elements 1460 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 By adding the assigned weights and assigned values of the technical and management/cost control elements 43) How do you apply the decrement factor if you find that the contractor appears to have overestimated the proposal price? Decrease the government objective by the decrement factor Divide the decrement factor from all sampled items Increase the government objective by the decrement factor Multiply the decrement factor by the total cost of all sampled items 886 44) Which of the following situations would exempt a contract or subcontract from CAS coverage? Value of the contract or subcontract is $7.5M or less The Economic Price Adjustment clause for a commercial item is based on an index formulated with a contractor’s historical cost data 1563 The contract or subcontract is with a small business Sole source firm fixed price contract requiring submission of cost or pricing data 45) 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? Coefficient of determination and the median Prediction interval and significance level Standard error of the estimate and the mean "Goodness" of the fit and statistical significance 1300 46) Given the following data, calculate the sample median. Sample data: 17, 16, 17, 16, 17, 18, 18 16 18 17.5 17 797 47) Which of the following labor classifications most likely involves fashioning parts from raw materials or purchased materials? Quality Control Fabrication 931 Assembly Engineering 48) A contractor incurs a cost which is determined to be unallowable. Other costs which would not have been incurred “but for” the incurrence of the unallowable costs are: Indirect costs with are unallowable Indirect costs which will be allocated on the basis of benefits received Directly associated costs which are allowable Directly associated costs and are also unallowable 49) 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? Interior color of all similar cars Exterior color of all similar cars Body style of all similar cars Mileage of all similar cars 50) When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the following statements is true? They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum They acknowledge their reliance on that cost or pricing data by signing the Price Negotiation Memorandum They must have had legal counsel review the cost or pricing data prior to negotiations They must certify that they relied on that certified cost or pricing data in the Price Negotiation Memorandum 51) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? Use a stratified sampling techniques to evaluate contractor’s labor hour estimate Decrement labor hours estimate according to DCAA standard decrement Examine proposed hours on other contracts from the same contractor Compare proposed hours with a Government should-cost estimate 52) 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 Assigning the risk factors for profit calculations Evaluating the bill of materials Developing a price negotiation objective for labor costs Selecting the appropriate contract type PG-1554 53) Which of the following is an indirect cost pool? Manufacturing labor General and Administrative Expenses PG-1121 Assembly labor Direct material 54) When material prices may vary significantly from current inventory values, which estimating method should be used? Long Term Agreement Pricing Current Quotes Historical Quotes Inventory Pricing PG-717 55) Which of these situations warrants the use of a round-table estimate? 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 $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). PG-950 Contains 25 Questions (Attempt=2/99) Analyzing Contract Costs Exam 1) Which of the following is an effective use of stratified sampling? Analyzing 100% of the items Analyzing 20% of the items that are under $25,000 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 2) Which of the following is the best strategy 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 3) Which of the following is required in the contractor’s proposal when Cost or Pricing Data are required? Basis for establishing proposed profit or fee Data showing that adequate price competition for acquisitions exceeding the TINA threshold was obtained Forecasts for any planned facility capital improvements Documentation of agreed to procedures for validating each basis of estimate 4) A cost is allowable if it is: 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 Consistent, uniform, and reasonable Established, disclosed and allocated 5) Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data? Prices are set by law or regulation Sole source acquisition of $3.5M FFP effort; price determined using cost analysis Non-commercial modification of a commercial item. Modification funded by DoD and constitutes 5% of value of modification Price may be determined fair and reasonable based on price analysis proposal techniques 6) 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: Generally Accepted Accounting Practice Cost Accounting Standards Process Cost System Job Order Accounting 7) How is simple linear regression used? 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 make predictions about one dependent variable based on one independent variable To ensure contractor’s estimates properly capture the reduction of labor costs associated with repetitive production tasks 8) When given a set of data that appears to contain outliers, which measure of central tendency is most appropriate to use? Mode Mean Coefficient of Determination Median 9) Which three elements are necessary for calculating a confidence interval? Mean, median, and mode Variance, t-value, sample mean Sample mean, t-value, standard error of the mean 10) Identify the objective of performing proposal analysis. To ensure the final agreed to price is fair and reasonable To gain a more complete understanding of the company’s rates and factors To provide the contract negotiator the best possible profit or fee objective To ensure the government negotiates the lowest possible price for goods and services 11) What is the definition of a Disclosure Statement? A statement submitted by the contractor identifying the basis of estimate for each individual cost element contained in their proposal Confidential document identifying all potential conflicts of interest that may arise as a result of a particular contract award Certified record of all internal contractor rates and factors Written description of a contractor’s cost accounting practices and procedures 12) Identify the correct definition of “Cost Realism Analysis.” 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 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 13) When is the working capital adjustment used while calculating profit/fee? On all fixed price contracts On all fixed price contracts with performance based payments On all fixed price contracts with progress payments On all fixed price contracts with financing 14) 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 line repair of a turret assembly for an M1/A2 Abrams tank Assembly of two prototype aerial refueling airplanes 15) Which of the following must be true to properly classify a cost as an “other direct cost”? All of these The offeror customarily treats similar costs as “other direct costs” under similar circumstances The contractor’s accounting system segregates “other direct costs” from similar indirect costs The proposed cost benefits only the proposed contract work 16) Who has the authority to waive CAS applicability for a particular contract? The Cognizant Federal Agency Official The Contracting Officer's Representative The Agency Head A level above the contracting officer 17) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? Divided into the FCCOM total amount Multiplied by the FCCOM total amount Treasury rate is not used in calculating FCCOM Divided by the Weighted Guidelines profit objective 18) 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 19) Which inventory pricing method is being used when a company recalculates inventory prices every time a new item is added to the inventory? Standard Cost Last In/First Out (LIFO) Weighted Average Moving Average 20) A contractor incurs costs for raw materials to be used in two different government contracts. Is the total value of this raw material allocable to one contract? No, material must be used and charged specifically to the benefiting contract Yes, because all the material is to be used for government contracts No, raw material is always charged as an overhead expense Yes, due to the efficiency gained by procuring all the material at one time 21) When a contract is subject to CAS, the Contracting Officer: Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official 22) 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 Selecting the appropriate contract type Developing a price negotiation objective for labor costs Evaluating the bill of materials Assigning the risk factors for profit calculations 23) Which of these statements below is correct regarding the criteria for classifying a special test equipment cost as an "other direct cost”? Engineered, designed, fabricated, or modified to meet not only the requirements of the current contract but also the requirements of all other contracts An item (e.g., fixture, pattern, or gauge) that is necessary in aiding the development of a unique product Developed and engineered by a subcontractor who is not currently working on another contract Engineered, designed, fabricated, or modified to meet specific contract needs and cannot be used for other contracts 24) 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 Total price Direct and Indirect costs Subtotal of costs 25) Which of the following is a factor that affects profit/fee calculations? Magnitude of the contract in dollars Distribution of equipment percentage Contract type Profit/fee percentage historically paid to contractor Contains 25 Questions (Attempt=2/99) Analyzing Contract Costs Exam 1) Which of the following is an effective use of stratified sampling? Analyzing 100% of the items 784 Analyzing 20% of the items that are under $25,000 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 2) Which of the following is the best strategy to mitigate cost risk? Conduct adequate market research prior to entering negotiations 1587 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 3) Which of the following is required in the contractor’s proposal when Cost or Pricing Data are required? Basis for establishing proposed profit or fee Data showing that adequate price competition for acquisitions exceeding the TINA threshold was obtained 1594 Forecasts for any planned facility capital improvements Documentation of agreed to procedures for validating each basis of estimate 4) A cost is allowable if it is: 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 246 Consistent, uniform, and reasonable Established, disclosed and allocated 5) Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data? Prices are set by law or regulation 352 Sole source acquisition of $3.5M FFP effort; price determined using cost analysis 279 Non-commercial modification of a commercial item. Modification funded by DoD and constitutes 5% of value of modification Price may be determined fair and reasonable based on price analysis proposal techniques 6) 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: Generally Accepted Accounting Practice Cost Accounting Standards Process Cost System Job Order Accounting 463 7) How is simple linear regression used? 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 make predictions about one dependent variable based on one independent variable 1267 To ensure contractor’s estimates properly capture the reduction of labor costs associated with repetitive production tasks 8) When given a set of data that appears to contain outliers, which measure of central tendency is most appropriate to use? Mode Mean 764 Coefficient of Determination Median 9) Which three elements are necessary for calculating a confidence interval? Mean, median, and mode Variance, t-value, sample mean 860 Sample mean, t-value, standard error of the mean 10) Identify the objective of performing proposal analysis. To ensure the final agreed to price is fair and reasonable 549 To gain a more complete understanding of the company’s rates and factors To provide the contract negotiator the best possible profit or fee objective To ensure the government negotiates the lowest possible price for goods and services 11) What is the definition of a Disclosure Statement? A statement submitted by the contractor identifying the basis of estimate for each individual cost element contained in their proposal 648 Confidential document identifying all potential conflicts of interest that may arise as a result of a particular contract award Certified record of all internal contractor rates and factors Written description of a contractor’s cost accounting practices and procedures 12) Identify the correct definition of “Cost Realism Analysis.” 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 111 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 13) When is the working capital adjustment used while calculating profit/fee? On all fixed price contracts On all fixed price contracts with performance based payments 1474 On all fixed price contracts with progress payments On all fixed price contracts with financing 14) 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 line repair of a turret assembly for an M1/A2 Abrams tank 1366 Assembly of two prototype aerial refueling airplanes 15) Which of the following must be true to properly classify a cost as an “other direct cost”? All of these The offeror customarily treats similar costs as “other direct costs” under similar circumstances The contractor’s accounting system segregates “other direct costs” from similar indirect costs The proposed cost benefits only the proposed contract work 16) Who has the authority to waive CAS applicability for a particular contract? The Cognizant Federal Agency Official The Contracting Officer's Representative The Agency Head 48 CFR 30.201-5 - Waiver A level above the contracting officer 17) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? Divided into the FCCOM total amount internet Multiplied by the FCCOM total amount Treasury rate is not used in calculating FCCOM Divided by the Weighted Guidelines profit objective 18) 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 1508 Statement that the FAR was consistently followed 19) Which inventory pricing method is being used when a company recalculates inventory prices every time a new item is added to the inventory? Standard Cost Last In/First Out (LIFO) Weighted Average Moving Average 746 20) A contractor incurs costs for raw materials to be used in two different government contracts. Is the total value of this raw material allocable to one contract? No, material must be used and charged specifically to the benefiting contract 620 Yes, because all the material is to be used for government contracts No, raw material is always charged as an overhead expense Yes, due to the efficiency gained by procuring all the material at one time 21) When a contract is subject to CAS, the Contracting Officer: Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO ??561 May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official 22) 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 Selecting the appropriate contract type 761 Developing a price negotiation objective for labor costs Evaluating the bill of materials Assigning the risk factors for profit calculations 23) Which of these statements below is correct regarding the criteria for classifying a special test equipment cost as an "other direct cost”? Engineered, designed, fabricated, or modified to meet not only the requirements of the current contract but also the requirements of all other contracts ?? An item (e.g., fixture, pattern, or gauge) that is necessary in aiding the development of a unique product Developed and engineered by a subcontractor who is not currently working on another contract Engineered, designed, fabricated, or modified to meet specific contract needs and cannot be used for other contracts 24) 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 Total price Direct and Indirect costs Subtotal of costs 25) Which of the following is a factor that affects profit/fee calculations? Magnitude of the contract in dollars Distribution of equipment percentage Contract type 1459 Profit/fee percentage historically paid to contractor Analyzing Contract Costs Exam • 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. Back to Status page contains 25 Questions 1) Which of the following must be true to properly classify a cost as an “other direct cost”? [Recognize concerns that affect the other direct costs proposed] All of these The proposed cost benefits only the proposed contract work The offeror customarily treats similar costs as “other direct costs” under similar circumstances The contractor’s accounting system segregates “other direct costs” from similar indirect costs 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) 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 4) 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] Assembly line repair of a turret assembly for an M1/A2 Abrams tank Assembly of two prototype aerial refueling airplanes Fabrication of a single jet engine frame assembly Fabrication of a new aircraft carrier 5) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? [Recognize elements affecting facilities capital cost of money] 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 6) Which of the following is a factor that affects profit/fee calculations? [Identify the factors affecting profit/fee analysis] Contract type Distribution of equipment percentage Magnitude of the contract in dollars Profit/fee percentage historically paid to contractor 7) When is the working capital adjustment used while calculating profit/fee? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] 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 8) 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.] [Remediation Accessed :N] Total costs Subtotal of costs Total price Direct and Indirect costs 9) 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 10) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] [Remediation Accessed :N] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 11) Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data? [Determine if an exception to the Truth-in-Negotiations Act applies] Prices are set by law or regulation Sole source acquisition of $3.5M FFP effort; price determined using cost analysis 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 12) Who has the authority to waive CAS applicability for a particular contract? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] The Agency Head A level above the contracting officer The Contracting Officer's Representative The Cognizant Federal Agency Official 13) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 14) What is the definition of a Disclosure Statement? [Identify the purpose of a Disclosure Statement] [Remediation Accessed :N] Written description of a contractor’s cost accounting practices and procedures A statement submitted by the contractor identifying the basis of estimate for each individual cost element contained in their proposal Confidential document identifying all potential conflicts of interest that may arise as a result of a particular contract award Certified record of all internal contractor rates and factors 15) A cost is allowable if it is: [Determine if a cost is allowable] Reasonable, allocable and compliant with CAS/GAAP Established, disclosed and allocated 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 16) A contractor incurs costs for raw materials to be used in two different government contracts. Is the total value of this raw material allocable to one contract? [Determine if a cost is allocable] No, material must be used and charged specifically to the benefiting contract Yes, because all the material is to be used for government contracts Yes, due to the efficiency gained by procuring all the material at one time No, raw material is always charged as an overhead expense 17) Which of the following is required in the contractor’s proposal when Cost or Pricing Data are required? [Identify the required cost elements in FAR Table 15-2] Documentation of agreed to procedures for validating each basis of estimate Forecasts for any planned facility capital improvements Data showing that adequate price competition for acquisitions exceeding the TINA threshold was obtained Basis for establishing proposed profit or fee 18) 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: [Identify the two commonly used systems for cost accounting] [Remediation Accessed :N] Generally Accepted Accounting Practice Cost Accounting Standards Process Cost System Job Order Accounting 19) Identify the objective of performing proposal analysis. [Identify the fundamentals of cost analysis] To ensure the final agreed to price is fair and reasonable To ensure the government negotiates the lowest possible price for goods and services To provide the contract negotiator the best possible profit or fee objective To gain a more complete understanding of the company’s rates and factors 20) Identify the correct definition of “Cost Realism Analysis.” [Distinguish between cost analysis, price analysis, and cost realism analysis] The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement 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 21) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 22) 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] Moving Average Weighted Average Standard Cost Last In/First Out (LIFO) 23) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a pre-negotiation objective] [Remediation Accessed :N] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 24) 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] Median Coefficient of Determination Mean Mode 25) Which three elements are necessary for calculating a confidence interval? [Identify the process for establishing a confidence interval] [Remediation Accessed :N] Sample mean, t-value, standard error of the mean Mean, median, and mode Variance, t-value, sample mean Contains 11 Questions (Attempt=3/99) Analyzing Contract Costs Exam 1) When is the working capital adjustment used while calculating profit/fee? On all fixed price contracts with progress payments On all fixed price contracts with financing 1477 On all fixed price contracts On all fixed price contracts with performance based payments 2) A measure of the amount of dispersion, or distance, between data points is the: Relative dispersion Standard Deviation Coefficient of variation Absolute dispersion 804 3) Which of the following is an effective use of stratified sampling? Analyzing the items that make up 80% of the total material cost and 10% of the remaining items Analyzing 10% of the items selected randomly Analyzing 20% of the items that are under $25,000 876 Analyzing 100% of the itemsXXXXXXXX 4) Each Price Negotiation Memorandum must contain which of the following? Statement that the FAR was consistently followed Signature of the Legal Counsel Signature of the Contract SpecialistXXXXXXXX Statement that the price is fair and reasonable 1578 5) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? 15% 6% 1474 10% 1% 6) The cost accounting systems that are used by a contractor manufacturing a number of identical units for multiple customers are: Job Order Accounting Cost Accounting Standards 1595 Process Cost System 469 Generally Accepted Accounting Practice 7) Which of the following situations would require a Disclosure Statement? Anytime a cost reimbursement contract is awarded Contractor receives a contract valued at $7.5M or greater Anytime a sole-source contract is awarded Contractor receives a CAS covered contract or a subcontract valued at $50M in a cost accounting period 287 8) Which three elements are necessary for calculating a confidence interval? Variance, t-value, sample mean Internet Sample mean, t-value, standard error of the mean Mean, median, and mode 9) Which of the following situations would you most likely employ linear regression techniques? Analyzing the accuracy of a should-cost analysis generated by a DCMA Industrial Engineer 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 1388 Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office XXXXXX 10) 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 Selecting the appropriate contract type XXXX Assigning the risk factors for profit calculations Evaluating the bill of materials Developing a price negotiation objective for labor costs 11) When a contract is subject to CAS, the Contracting Officer: May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer FAR Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO XXXXXX Analyzing Contract Costs Exam • 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. Back to Status page contains 11 Questions 1) Which of the following situations would you most likely employ linear regression techniques? [Identify what regression analysis is] 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 Calculating the mean cost of one individual unit in a production run of 10,000 units Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office 2) When is the working capital adjustment used while calculating profit/fee? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] 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 3) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? [– Develop a pre-negotiation position for profit or fee that is fair and reasonable.] [Remediation Accessed :N] 10% 1% 6% 15% 4) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 5) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 6) Which of the following situations would require a Disclosure Statement? [Identify the purpose of a Disclosure Statement] 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 Anytime a cost reimbursement contract is awarded Anytime a sole-source contract is awarded 7) 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] Cost Accounting Standards Job Order Accounting Generally Accepted Accounting Practice Process Cost System 8) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 9) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a pre-negotiation objective] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 10) 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 Absolute dispersion Relative dispersion Coefficient of variation 11) Which three elements are necessary for calculating a confidence interval? [Identify the process for establishing a confidence interval] [Remediation Accessed :N] Sample mean, t-value, standard error of the mean Mean, median, and mode Variance, t-value, sample mean Contains 3 Questions (Attempt=5/99) Analyzing Contract Costs Exam 1) Which contract clause is inserted in contracts that are subject to full CAS coverage? FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-2 Cost Accounting Standards FAR 52.230-1 Cost Accounting Standards Notices and Certification XXXX FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 2) The cost accounting systems that are used by a contractor manufacturing a number of identical units for multiple customers are: Job Order Accounting 1599 Generally Accepted Accounting Practice Principal Process Cost System 466 Cost Accounting Standards 1599 3) When is the working capital adjustment used while calculating profit/fee? On all fixed price contracts with progress payments 1474 On all fixed price contracts On all fixed price contracts with financing XXXX On all fixed price contracts with performance based payments XXXXX Contains 7 Questions (Attempt=4/99) Analyzing Contract Costs Exam 1) 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: Job Order Accounting Internet Process Cost System Cost Accounting Standards Internet Generally Accepted Accounting Practice 2) When calculating profit/fee, how is the “performance risk (composite)” calculated? By adding the assigned weights and assigned values of the technical and management/cost control elements XXXXXXXXXX By adding the assigned weight and assigned value of the technical and management/cost control elements and dividing the sum by 2 CH11 Internet By multiplying the assigned values of the technical and management/cost control elements By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together 3) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? 6% xxxxx 1% 10% Tanya Says so 15% XXXXX 4) When a contract is subject to CAS, the Contracting Officer: May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer XXXXX May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance 30.202-6 Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO XXXX May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official 30.2 FAR 30.202-8 5) A measure of the amount of dispersion, or distance, between data points is the: Standard Deviation Relative dispersion Coefficient of variation XXXXX Absolute dispersion XXXX 6) Which three elements are necessary for calculating a confidence interval? Sample mean, t-value, standard error of the mean 854 Mean, median, and mode Variance, t-value, sample mean XXXXXX 7) Which of the following is an effective use of stratified sampling? Analyzing the items that make up 80% of the total material cost and 10% of the remaining items 773 Analyzing 20% of the items that are under $25,000 XXXXX Analyzing of the items selected randomly Internet Analyzing 100% of the items XXXX Analyzing Contract Costs Exam 6-Pass 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. Back to Status page contains 2 Questions 1) Which contract clause is inserted in contracts that are subject to full CAS coverage? [Determine the level of CAS coverage that applies] FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-1 Cost Accounting Standards Notices and Certification 2) 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: [Identify the two commonly used systems for cost accounting] Job Order Accounting Generally Accepted Accounting Practice Process Cost System Cost Accounting Standards Exam 5 F 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' epresents visited links. Back to Status page contains 3 Questions 1) 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 2) Which contract clause is inserted in contracts that are subject to full CAS coverage? [Determine the level of CAS coverage that applies] [Remediation Accessed :N] FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-1 Cost Accounting Standards Notices and Certification 3) 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 Generally Accepted Accounting Practice Cost Accounting Standards Job Order Accounting Analyzing Contract Costs Exam 4 • 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. Back to Status page contains 7 Questions 1) When calculating profit/fee, how is the “performance risk (composite)” calculated? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together 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 2) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? [– Develop a pre-negotiation position for profit or fee that is fair and reasonable.] 10% 1% 6% 15% 3) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 4) 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: [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 5) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] 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 Analyzing 10% of the items selected randomly 6) 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] Standard Deviation Absolute dispersion Relative dispersion Coefficient of variation 7) Which three elements are necessary for calculating a confidence interval? [Identify the process for establishing a confidence interval] Sample mean, t-value, standard error of the mean Mean, median, and mode Variance, t-value, sample mean Analyzing Contract Costs Exam 3 • 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. Back to Status page contains 11 Questions 1) Which of the following situations would you most likely employ linear regression techniques? [Identify what regression analysis is] 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 Calculating the mean cost of one individual unit in a production run of 10,000 units Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office 2) When is the working capital adjustment used while calculating profit/fee? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] 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 3) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? [– Develop a pre-negotiation position for profit or fee that is fair and reasonable.] [Remediation Accessed :N] 10% 1% 6% 15% 4) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 5) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 6) Which of the following situations would require a Disclosure Statement? [Identify the purpose of a Disclosure Statement] 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 Anytime a cost reimbursement contract is awarded Anytime a sole-source contract is awarded 7) 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] Cost Accounting Standards Job Order Accounting Generally Accepted Accounting Practice Process Cost System 8) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 9) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a pre-negotiation objective] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 10) 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 Absolute dispersion Relative dispersion Coefficient of variation 11) Which three elements are necessary for calculating a confidence interval? [Identify the process for establishing a confidence interval] [Remediation Accessed :N] Sample mean, t-value, standard error of the mean Mean, median, and mode Variance, t-value, sample mean Analyzing Contract Costs Exam 2 • 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. Back to Status page contains 25 Questions 1) Which of the following must be true to properly classify a cost as an “other direct cost”? [Recognize concerns that affect the other direct costs proposed] All of these The proposed cost benefits only the proposed contract work The offeror customarily treats similar costs as “other direct costs” under similar circumstances The contractor’s accounting system segregates “other direct costs” from similar indirect costs 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) 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 4) 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] Assembly line repair of a turret assembly for an M1/A2 Abrams tank Assembly of two prototype aerial refueling airplanes Fabrication of a single jet engine frame assembly Fabrication of a new aircraft carrier 5) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)? [Recognize elements affecting facilities capital cost of money] 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 6) Which of the following is a factor that affects profit/fee calculations? [Identify the factors affecting profit/fee analysis] Contract type Distribution of equipment percentage Magnitude of the contract in dollars Profit/fee percentage historically paid to contractor 7) When is the working capital adjustment used while calculating profit/fee? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] 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 8) 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.] [Remediation Accessed :N] Total costs Subtotal of costs Total price Direct and Indirect costs 9) 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 10) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] [Remediation Accessed :N] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 11) Which of the following situations are considered exempt from the submission of Certified Cost or Pricing Data? [Determine if an exception to the Truth-in-Negotiations Act applies] Prices are set by law or regulation Sole source acquisition of $3.5M FFP effort; price determined using cost analysis 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 12) Who has the authority to waive CAS applicability for a particular contract? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] The Agency Head A level above the contracting officer The Contracting Officer's Representative The Cognizant Federal Agency Official 13) When a contract is subject to CAS, the Contracting Officer: [Determine the level of CAS coverage that applies] [Remediation Accessed :N] May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official May not award a contract until the cognizant Program Office official has conducted a review of the disclosure statement for adequacy and compliance May not award a contract until a written adequacy determination has been made by the Cognizant Federal Agency Official unless approved as mission critical at least one level above the contracting officer Is responsible only for ensuring the appropriate provisions are included in the solicitation. All other responsibilities for CAS are conducted by the ACO 14) What is the definition of a Disclosure Statement? [Identify the purpose of a Disclosure Statement] [Remediation Accessed :N] Written description of a contractor’s cost accounting practices and procedures A statement submitted by the contractor identifying the basis of estimate for each individual cost element contained in their proposal Confidential document identifying all potential conflicts of interest that may arise as a result of a particular contract award Certified record of all internal contractor rates and factors 15) A cost is allowable if it is: [Determine if a cost is allowable] Reasonable, allocable and compliant with CAS/GAAP Established, disclosed and allocated 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 16) A contractor incurs costs for raw materials to be used in two different government contracts. Is the total value of this raw material allocable to one contract? [Determine if a cost is allocable] No, material must be used and charged specifically to the benefiting contract Yes, because all the material is to be used for government contracts Yes, due to the efficiency gained by procuring all the material at one time No, raw material is always charged as an overhead expense 17) Which of the following is required in the contractor’s proposal when Cost or Pricing Data are required? [Identify the required cost elements in FAR Table 15-2] Documentation of agreed to procedures for validating each basis of estimate Forecasts for any planned facility capital improvements Data showing that adequate price competition for acquisitions exceeding the TINA threshold was obtained Basis for establishing proposed profit or fee 18) 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: [Identify the two commonly used systems for cost accounting] [Remediation Accessed :N] Generally Accepted Accounting Practice Cost Accounting Standards Process Cost System Job Order Accounting 19) Identify the objective of performing proposal analysis. [Identify the fundamentals of cost analysis] To ensure the final agreed to price is fair and reasonable To ensure the government negotiates the lowest possible price for goods and services To provide the contract negotiator the best possible profit or fee objective To gain a more complete understanding of the company’s rates and factors 20) Identify the correct definition of “Cost Realism Analysis.” [Distinguish between cost analysis, price analysis, and cost realism analysis] The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement 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 21) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 22) 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] Moving Average Weighted Average Standard Cost Last In/First Out (LIFO) 23) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a pre-negotiation objective] [Remediation Accessed :N] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 24) 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] Median Coefficient of Determination Mean Mode 25) Which three elements are necessary for calculating a confidence interval? [Identify the process for establishing a confidence interval] [Remediation Accessed :N] Sample mean, t-value, standard error of the mean Mean, median, and mode Variance, t-value, sample mean Analyzing Contract Costs Exam 1 • 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. Back to Status page contains 55 Questions 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] [Remediation Accessed :N] Travel Direct Material G&A Overhead Utilities 2) 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? [Determine if the other direct costs are properly proposed] [Remediation Accessed :N] 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 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. The travel costs are for warehouse personnel to attend OSHA training on how to safely handle hazardous materials. 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) Identify the formula for calculating indirect cost rates. [Identify the process of 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 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) Which of the following situations would you most likely employ linear regression techniques? [Identify what regression analysis is] [Remediation Accessed :N] 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 Calculating the mean cost of one individual unit in a production run of 10,000 units Comparing the proposed costs of a new computer database with the historical costs of all recent contracts in your office 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) 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? [Identify contract pricing situations where simple regression analysis should be considered] Mileage of all similar cars Interior color of all similar cars Body style of all similar cars Exterior color of all similar cars 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] "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] [Remediation Accessed :N] 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 best method for determining an improvement curve slope? [Identify the steps for using improvement curve analysis] Using actual historical data Using the median percentage from similar products Using established slopes from the Cost Estimator’s Reference Manual Using established slopes derived on recent procurements 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) Which of the following are factors used in calculating the Facilities Capital Cost of Money (FCCOM) amount? [Recognize elements affecting facilities capital cost of money] [Remediation Accessed :N] Proposal allocation base amounts Percentage of land, building, and profit distributions Company-wide allocation base amounts Division-wide 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 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 calculating profit/fee, how is the “performance risk (composite)” calculated? [Calculate a profit/fee using the appropriate structured approach] [Remediation Accessed :N] By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together 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 16) What would be the maximum fee you might negotiate for a cost plus fixed fee contract for advisory and assistance services contract? [– Develop a pre-negotiation position for profit or fee that is fair and reasonable.] [Remediation Accessed :N] 10% 1% 6% 15% 17) What is the government’s primary objective in negotiations? [Identify factors that contribute to success in any negotiation] To agree on a price that is fair and reasonable to the government and the contractor 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 ensure the agreed to price is the same, or lower, than the government’s objective 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) What is the single most important decision the Contracting Officer must make to mitigate cost risk? [Identify strategies to mitigate cost risk] [Remediation Accessed :N] Selection of contract type The profit/fee percentage objective The selection of a the awardee Whether to solicit to large business, or set aside for small business only 21) Each Price Negotiation Memorandum must contain which of the following? [Identify the key characteristics of a price negotiation memorandum] [Remediation Accessed :N] Statement that the price is fair and reasonable Statement that the FAR was consistently followed Signature of the Contract Specialist Signature of the Legal Counsel 22) 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?” [Identify cost analysis terms and techniques used when developing a pre-negotiation position] All of these are correct The award of any negotiated contract (except for undefinitized actions such as letter contracts 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 The modification of any sealed bid or negotiated contract 23) What is Certified Cost or Pricing Data subsequently found to have been inaccurate, incomplete, or noncurrent known as? [Identify terms associated with the Truth-inNegotiations Act (TINA)] Defective Pricing CICA Violation Data other than cost or pricing data Exception to certified cost or pricing data 24) Which of the following is an exception to the requirement to provide certified cost or pricing data? [Determine if an exception to the Truth-in-Negotiations Act applies] [Remediation Accessed :N] Adequate price competition Repetitive buy of same or similar item where certified cost or pricing data had been provided in past When the contracting officer determines the prices agreed upon are based on identical forecasting methods utilized in the Independent Government Estimate (IGE) Proposal is less than $7.5 M 25) When the Contracting Officer has relied on certified cost or pricing data in the price determination, which of the following statements is true? [Identify the remedy to the Government in the event that a contractor submits defective data] 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 They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum They acknowledge their reliance on that cost or pricing data by signing the Price Negotiation Memorandum 26) Which of the following situations would exempt a contract or subcontract from CAS coverage? [Identify the exemptions to Cost Accounting Standards (CAS) coverage] [Remediation Accessed :N] The contract or subcontract is with a small business Value of the contract or subcontract is $7.5M or less The Economic Price Adjustment clause for a commercial item is based on an index formulated with a contractor’s historical cost data Sole source firm fixed price contract requiring submission of cost or pricing data 27) Which contract clause is inserted in contracts that are subject to full CAS coverage? [Determine the level of CAS coverage that applies] [Remediation Accessed :N] FAR 52.230-2 Cost Accounting Standards FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-1 Cost Accounting Standards Notices and Certification 28) Which of the following situations would require a Disclosure Statement? [Identify the purpose of a Disclosure Statement] [Remediation Accessed :N] 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 Anytime a cost reimbursement contract is awarded Anytime a sole-source contract is awarded 29) A contractor incurs a cost which is determined to be unallowable. Other costs which would not have been incurred “but for” the incurrence of the unallowable costs are: [Determine if a cost is allowable] [Remediation Accessed :N] Directly associated costs and are also unallowable Indirect costs which will be allocated on the basis of benefits received Directly associated costs which are allowable Indirect costs with are unallowable 30) A cost is allocable if it: [Determine if a cost is allocable] [Remediation Accessed :N] Is incurred specifically for the contract Is reasonable and allowable Is distributed equally among the benefiting contracts Results in an inequitable allocation of costs. 31) Which of the following is the best method for determining if a proposed cost is reasonable? [Determine if a cost is reasonable] Comparing with other competitive proposals received in response to the solicitation Performing a quantitative analysis of the proposed cost using multivariate regression 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? [Identify the rationale for modeling a contractor’s cost proposal] When the value, importance, and complexity warrant When analyzing multiple commercial supply proposals Anytime you award a competitive contract 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 When analyzing multiple commercial supply proposals Anytime you award a competitive contract 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] Job Order Accounting Cost Accounting Standards Process Cost System Generally Accepted Accounting Practice 35) The purpose of an audit is to: [Identify situations when an audit should be requested] All of these are correct Determine if the data is accurate and complete Determine the degree of compliance with established procedures Verify transaction legality 36) How may you request an audit? [Identify the process for requesting an audit and the key players involved with the process] All of these are correct By telephone call By mail By e-mail 37) Select the item below that would likely be categorized as a Direct Material cost. [Identify the different types of material costs] The purchase of 104 motor assemblies needed to manufacture a product 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 38) Which of the following is true about analyzing summary cost estimates? [Determine the fairness and reasonableness of summary level cost estimates] Using a direct comparison with the cost of a similar contract effort is an acceptable summary estimating technique As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases 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 39) Identify when cost analysis is required. [Identify the fundamentals of cost analysis] [Remediation Accessed :N] To evaluate the reasonableness of individual cost elements when certified cost or pricing data are required Whenever a cost proposal is received To evaluate each individual proposal cost element including FCCOM and profit or fee On all proposals exceeding the Simplified Acquisition Threshold 40) Identify the correct definition of “Cost Analysis.”. [Distinguish between cost analysis, price analysis, and cost realism analysis] [Remediation Accessed :N] The review and evaluation of individual cost elements and proposed profit/fee in an offeror’s proposal Factual, not judgmental, and verifiable details of a cost proposal Independent review of vendor quotes, long term agreements, and overhead costs in a proposal Analysis of “should cost” estimates compared to proposed costs 41) Which of the following is known as a “Questioned Cost”? [Identify the various types of audits] Costs on which audit action has been completed and which are not considered as acceptable as a contract cost Costs which the auditor cannot evaluate as allowable or unallowable, because there is not enough information for analysis Costs that have not yet been evaluated Arithmetic difference between the amount proposed and the sum of the related questioned, unsupported, and unresolved amounts 42) Which sampling technique is used to focus on high-value items? [Determine the appropriateness of the offeror's cost estimating methodology] Stratified Random Cluster Nonprobability 43) Which of the following is an effective use of stratified sampling? [Establish the fairness and reasonableness of detailed quantity estimates] [Remediation Accessed :N] 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 Analyzing 10% of the items selected randomly 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] Current Quotes Historical Quotes Inventory Pricing Long Term Agreement Pricing 45) 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 [Identify contract situations where statistical analysis is an appropriate tool for developing a pre-negotiation objective] [Remediation Accessed :N] Developing a price negotiation objective for labor costs Selecting the appropriate contract type Evaluating the bill of materials Assigning the risk factors for profit calculations 46) 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 Absolute dispersion Relative dispersion Coefficient of variation 47) When calculating the confidence interval, why is the sample standard deviation used to derive the standard error of the mean? [Identify the process for establishing a confidence interval] [Remediation Accessed :N] The population standard deviation is not generally known The sample mean is used to derive the significance level The coefficient of variation is unknown Other methods of central tendency are not reliable 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] Multiply the decrement factor by the total cost of all sampled items Divide the decrement factor from all sampled items Increase the government objective by the decrement factor Decrease the government objective by the decrement factor 49) Given the following data, calculate the sample median. Sample data: 17, 16, 17, 16, 17, 18, 18 [Calculate a pre-negotiation objective using the appropriate statistical analysis techniques] 17 16 17.5 18 50) Which of the following would be a proper method of determining the reasonableness of a contractor’s proposed labor hour estimate? [Relate proposed labor hours to work requirements to determine reasonableness of direct labor costs] Compare proposed hours with a Government should-cost estimate Examine proposed hours on other contracts from the same contractor Decrement labor hours estimate according to DCAA standard decrement Use a stratified sampling techniques to evaluate contractor’s labor hour estimate 51) Which of these situations warrants the use of a round-table estimate? [Examine proposed labor rates to determine a fair and reasonable pre-negotiation position] 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. 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. 52) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal. [Identify proposed direct labor mix] Is the proposed skill mix reasonable for the work required? Does the contractor currently employ workers in all proposed labor categories? Is the proposed skill mix identical to the independent government estimate? Does the contractor compensate their employees for unpaid overtime? 53) Which of the following labor classifications most likely involves fashioning parts from raw materials or purchased materials? [Identify labor classifications] Fabrication Assembly Quality Control Engineering 54) Which of the following is a grouping of all positions that share the same title and pay level? [Identify types of other direct costs] Position class Position description Position classification plan Direct labor position 55) Which of the following is the statutory authority for requiring certified cost or pricing data? [Select the appropriate authority for requiring an offeror to provide cost or pricing data] 10 U.S.C. 2306(a) 10 U.S.C. 2304(a) 10 U.S.C. 941(b) 10 U.S.C. 2301(b) [Show More]

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