CLC 056 exam
Analyzing Contract Costs Exam (contains 55 questions)
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3.) What is the most common base for calculating the General and Administrative (G&A) overhead rate?
[Identify indirect cost pools and bases]
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7.) Which regression method would be used when there is more than one independent variable?
[Identify the different regression analysis methods]
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8.) Identify the situation where you would use simple linear regression.
9.) Which variable is also considered the independent variable?
10.) Which of the following situations would the use of improvement curve analysis likely be useful in evaluating proposed costs?
[Identify situations where improvement curve analysis would be appropriate]
[Remediation Accessed: N]
11.) What is the first step in conducting improvement curve analysis?
By adding the assigned weights and assigned values of the technical and management/cost control elements
By multiplying the assigned values of the technical and management/cost control elements
By adding the assigned weight and assigned value of the technical and management/cost control elements and dividing the sum by 2
By multiplying the assigned weight by the assigned value of the technical and the management/cost control element, and adding the two together
15%
1%
10%
6%
17.) Which of the following factors is critical to a successful negotiation?
The negotiation should be competitive
Avoid being too friendly, in case the negotiations get difficult Effectively prepare, plan, and communicate
Set your opening position extremely low to give room to negotiate
Win-Lose-Win Lose-Lose Win-Lose
Win-Win
19.) What is an important driver to a successful negotiation?
Ensure your position is heard
Obtain the lowest price for the government Listen to understand
Maintain position of power
Whether to solicit to large business, or set aside for small business only The profit/fee percentage objective
Selection of contract type
The selection of a the awardee
21.) Each Price Negotiation Memorandum must contain which of the following?
Statement that the price is fair and reasonable Signature of the Legal Counsel
Signature of the Contract Specialist
Statement that the FAR was consistently followed
Comparison of proposed prices with Independent Government Estimates (IGE) Comparison with competitive published price lists
Comparison of proposed prices received in response to the solicitation
Use of parametric estimating methods to highlight significant inconsistencies
Defective Pricing
Data other than cost or pricing data Exception to certified cost or pricing data CICA Violation
Prices are set by law or regulation
Price may be determined fair and reasonable based on price analysis proposal techniques
Non-commercial modification of a commercial item. Modification funded by DoD and constitutes 5% of value of modification
Sole source acquisition of $3.5M FFP effort; price determined using cost analysis
They must certify that they relied on that certified cost or pricing data in the Price Negotiation Memorandum
They acknowledge their reliance on that cost or pricing data by signing the Price Negotiation Memorandum
They are not required to certify that they relied on that cost or pricing data in the Price Negotiation Memorandum
They must have had legal counsel review the cost or pricing data prior to negotiations
Value of the contract or subcontract is $7.5M or less
The contract or subcontract is with a small business
Sole source firm fixed price contract requiring submission of cost or pricing data
The Economic Price Adjustment clause for a commercial item is based on an index formulated with a contractor’s historical cost data
27.) Which contract clause is inserted in contracts that are subject to full CAS coverage?
FAR 52.230-3 Disclosure and Consistency of Cost Accounting Practices FAR 52.230-2 Cost Accounting Standards
FAR 52.230-5 Cost Accounting Standards – Educational Institutions FAR 52.230-1 Cost Accounting Standards Notices and Certification
Certified record of all internal contractor rates and factors
Confidential document identifying all potential conflicts of interest that may arise as a result of a particular contract award
A statement submitted by the contractor identifying the basis of estimate for each individual cost element contained in their proposal
Written description of a contractor’s cost accounting practices and procedures
29.) A cost is allowable if it is: [Determine if a cost is allowable] [Remediation Accessed: N]
According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be accurate, current and complete
Consistent, uniform, and reasonable
Reasonable, allocable and compliant with CAS/GAAP Established, disclosed and allocated
30.) A cost is allocable if it:
Results in an inequitable allocation of costs.
Is distributed equally among the benefiting contracts Is incurred specifically for the contract
Is reasonable and allowable
Performing a quantitative analysis of the proposed cost using multivariate regression Comparing with other competitive proposals received in response to the solicitation
Evaluating the conditions surrounding the procurement. In cases of National Emergency or Contingency, any cost within 50% of the IGE is considered reasonable
Ensuring the proposed cost is no more than 25% greater than the last known procurement of the
item
32.) When is it most appropriate to document or model a contractor’s proposal?
When the value, importance, and complexity warrant Anytime you award a competitive contract
When analyzing multiple commercial supply proposals
Whenever there are values in excess of $1M included in the proposal
When the value, importance, and complexity warrant Anytime you award a competitive contract
When analyzing multiple commercial supply proposals
Whenever there are values in excess of $1M included in the proposal
34.) The cost accounting systems that are used by [Identify the two
Process Cost System Job Order Accounting
Cost Accounting Standards
Generally Accepted Accounting Practice
35.) The purpose of an audit is to:
Determine if the data is accurate and complete All of these are correct
Determine the degree of compliance with established procedures Verify transaction legality
By mail
All of these are correct By e-mail
By telephone call
37.) Select the item below that would likely be categorized as a Direct Material cost.
Rail transportation used to get the materials to the offeror's facility
Extra material or items that are left over from the contract and cannot be used Washers and seals used in the assembly process for all products
The purchase of 104 motor assemblies needed to manufacture a product
38.) Which of the following is true about analyzing summary cost estimates?
Using a direct comparison with the cost of a similar contract effort is an acceptable summary
The effects of price inflation are not considered in determining if direct comparisons were properly developed and applied
If a summary level estimate is as good as a detailed analysis, it is still required to use a detailed analysis
As the dollars and percentage of total costs increase, the emphasis on obtaining a detailed estimate decreases
39.) Identify when cost analysis is required.
On all proposals exceeding the Simplified Acquisition Threshold
To evaluate each individual proposal cost element including FCCOM and profit or fee Whenever a cost proposal is received
To evaluate the reasonableness of individual cost elements when certified cost or pricing data are required
40.) Identify the correct definition of “Cost Realism Analysis.”
The review of a proposal to ensure the contractor has properly documented adherence to their approved estimating system guidelines
The review and evaluation of individual cost elements, excluding profit, in a proposal
The process of examining and evaluating a proposal to ensure all elements of cost are in line with the Independent Government Estimate
The process of independently reviewing and evaluating specific elements of cost, in part to determine whether they reflect a clear understanding of the requirement
41.) Which of the following is known as a “Questioned Cost”?
Costs that have not yet been evaluated
Costs on which audit action has been completed and which are not considered as acceptable as a contract cost
Arithmetic difference between the amount proposed and the sum of the related questioned, unsupported, and unresolved amounts
Costs which the auditor cannot evaluate as allowable or unallowable, because there is not enough information for analysis
42.) Which sampling technique is used to focus on high-value items?
Nonprobability Stratified Random Cluster
43.) Which of the following is an effective use of stratified sampling?
Analyzing 10% of the items selected randomly
Analyzing the items that make up 80% of the total material cost and 10% of the remaining items Analyzing 20% of the items that are under $25,000
Analyzing 100% of the items
44.) When material prices may vary significantly from current inventory values, which estimating method should be used?
[Evaluate the reasonableness of unit cost estimates]
[Remediation Accessed: N]
Historical Quotes
Long Term Agreement Pricing Inventory Pricing
Current Quotes
Selecting the appropriate contract type Evaluating the bill of materials
Assigning the risk factors for profit calculations
Developing a price negotiation objective for labor costs
46.) When given a set of data that appears to contain outliers, which measure of central tendency is most appropriate to use?
[Differentiate between the measures of central tendency and the methods for measuring dispersion]
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Mean
Coefficient of Determination Median
Mode
The coefficient of variation is unknown
The population standard deviation is not generally known Other methods of central tendency are not reliable
The sample mean is used to derive the significance level
48.) How do you apply the decrement factor if you find that the contractor appears to have overestimated the proposal price?
[Identify the process for using stratified sampling]
[Remediation Accessed: N]
Multiply the decrement factor by the total cost of all sampled items Increase the government objective by the decrement factor Decrease the government objective by the decrement factor
Divide the decrement factor from all sampled items
17
16
17.5
18
Use a stratified sampling techniques to evaluate contractor’s labor hour estimate Decrement labor hours estimate according to DCAA standard decrement Compare proposed hours with a Government should-cost estimate
Examine proposed hours on other contracts from the same contractor
51.) Which of these situations warrants the use of a round-table estimate?
A contract is for $900,000 and there have been several similar contracts performed in the past.
Usually, offerors will use comparison estimates for this type of work.
A contract is for a unique item, and there is no historical data available (i.e., detailed drawings, bill of materials, firm specifications).
A contract is for a service that has been provided in the past, and offerors will need to submit data detailing the time it will take for each worker to complete a specific task.
A contract is for a service that has been provided in the past, and offerors will need to submit data detailing the time it will take for each worker to complete a specific task.
52.) Identify the primary issue you should consider when analyzing direct labor categories in a contractor’s proposal.
[Identify proposed direct labor mix]
[Remediation Accessed: N]
Is the proposed skill mix reasonable for the work required?
Does the contractor compensate their employees for unpaid overtime?
Is the proposed skill mix identical to the independent government estimate? Does the contractor currently employ workers in all proposed labor categories?
53.) Which of the following is a grouping of all [Identify labor [Remediation
Position description Position class
Direct labor position Position classification plan
Position description Position class
Direct labor position Position classification plan
An offer of $800,000 for an item from the only known source of an electronic system unique to Government requirements
An offer of $525,000 for a catalog-priced commercial item
A single-source offer for $96,000 for Research and Development
A commercial item contract modification which indicates that $398,000 of work will be removed by modification and $390,000 of work will be added.
Analyzing Contract Costs Exam (contains 18 questions)
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1.) Which of the following is an indirect cost pool?
Assembly labor
Direct material Manufacturing labor
General and Administrative Expenses
Allocation Base multiplied by Expense Pool Overhead Rate multiplied by Allocation Base Allocation Base divided by Expense Pool Expense Pool divided by Allocation Base
Segmented regression Local regression Curvilinear regression Simple linear regression
Fully automated assembly line
Production facility specializing in “one-off” or unique item production Fabrication plant that generates 100,000 units per month
Assembly line with high proportion of manual labor
5.) Which of the following is a factor that affects profit/fee calculations?
Magnitude of the contract in dollars
Distribution of equipment percentage
Profit/fee percentage historically paid to contractor Contract type
6.) When is the working capital adjustment used while calculating profit/fee?
On all fixed price contracts
On all fixed price contracts with financing
On all fixed price contracts with performance based payments On all fixed price contracts with progress payments
Anytime a sole-source contract is awarded Anytime a cost reimbursement contract is awarded
Contractor receives a CAS covered contract or a subcontract valued at $50M in a cost accounting period
Contractor receives a contract valued at $7.5M or greater
8.) A contractor incurs a cost which is determined to be unallowable. Other costs which would not have been incurred “but for” the incurrence of the unallowable costs are:
[Determine if a cost is allowable]
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Indirect costs with are unallowable
Directly associated costs which are allowable
Indirect costs which will be allocated on the basis of benefits received Directly associated costs and are also unallowable
There is no argument as the proposed costs are clearly allowable
The government assumes no presumption of reasonableness to the incurrence of costs by a contractor
The proposed costs are considered reasonable unless the Government can prove otherwise Irrefutable proof of actual costs shall be accepted by the Government as reasonable
Basis for establishing proposed profit or fee
Forecasts for any planned facility capital improvements
Data showing that adequate price competition for acquisitions exceeding the TINA threshold was obtained
Documentation of agreed to procedures for validating each basis of estimate
11.) The two cost accounting systems that are used by a contractor manufacturing a number of specifically identifiable physical units and whose costs are normally accumulated under separate orders is:
[Identify the two commonly used systems for cost accounting]
[Remediation Accessed: N]
Job Order Accounting
Generally Accepted Accounting Practice Process Cost System
Cost Accounting Standards
By mail By e-mail
By telephone call
All of these are correct
13.) Which inventory pricing method is being used when a company recalculates inventory prices every time a new item is added to the inventory?
[Evaluate the reasonableness of unit cost estimates]
[Remediation Accessed: N]
Last In/First Out (LIFO) Standard Cost
Moving Average Weighted Average
14.) A measure of the amount of dispersion, or distance, between data points is the:
[Differentiate between the measures of central tendency and the methods for measuring dispersion]
[Remediation Accessed: N]
Standard Deviation Relative dispersion Coefficient of variation Absolute dispersion
15.) Identify the first step in conducting stratified sampling.
Identify items for 100% analysis Develop the decrement factor Group like items together
Randomly select a sample size equal to 20% of the total number of items
16.) Which of the following labor categories in a contractor’s proposal for Grounds Maintenance would raise concern?
[Identify proposed direct labor mix]
[Remediation Accessed: N]
Quality control manager Millwright
Project manager Maintenance technician
Fabrication Engineering Quality Control Assembly
Costs that will benefit the proposed contract as well as other contracts currently in progress
Costs that can be identified with a specific contract and which the offeror does not treat as a direct material cost or a direct labor cost
Costs that have already been charged as direct material costs and direct labor costs for the same
task
Costs that can be identified with a specific contract and which the offeror treats as a direct material
cost but not a direct labor cost
Analyzing Contract Costs Exam (contains 8 questions)
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Overhead Rate multiplied by Allocation Base
Expense Pool divided by Allocation Base Allocation Base multiplied by Expense Pool Allocation Base divided by Expense Pool
2.) Which of the following situations would require a Disclosure Statement?
Contractor receives a contract valued at $7.5M or greater
Contractor receives a CAS covered contract or a subcontract valued at $50M in a cost accounting period
Anytime a sole-source contract is awarded Anytime a cost reimbursement contract is awarded
3.) A cost is allowable if it is:
Established, disclosed and allocated Consistent, uniform, and reasonable
Reasonable, allocable and compliant with CAS/GAAP
According to the terms and conditions of the contract, compliant with CAS/GAAP and certified to be accurate, current and complete
Evaluating the conditions surrounding the procurement. In cases of National Emergency or Contingency, any cost within 50% of the IGE is considered reasonable
Performing a quantitative analysis of the proposed cost using multivariate regression
Ensuring the proposed cost is no more than 25% greater than the last known procurement of the
item
Comparing with other competitive proposals received in response to the solicitation
Weighted Average
Last In/First Out (LIFO) Moving Average Standard Cost
6.) Which of the following labor categories in a contractor’s proposal for Grounds Maintenance would raise concern?
[Identify proposed direct labor mix]
[Remediation Accessed: N]
Project manager
Quality control manager Maintenance technician Millwright
Assembly Engineering Quality Control Fabrication
8.) Which one of the choices below is the correct definition of other direct costs?
task
Costs that have already been charged as direct material costs and direct labor costs for the same
Costs that can be identified with a specific contract and which the offeror does not treat as a direct
material cost or a direct labor cost
Costs that will benefit the proposed contract as well as other contracts currently in progress
Costs that can be identified with a specific contract and which the offeror treats as a direct material cost but not a direct labor cost
Analyzing Contract Costs Exam (contains 3 questions)
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1.) Identify the formula for calculating indirect cost rates.
Allocation Base multiplied by Expense Pool Expense Pool divided by Allocation Base Overhead Rate multiplied by Allocation Base Allocation Base divided by Expense Pool
Is the proposed skill mix identical to the independent government estimate? Does the contractor compensate their employees for unpaid overtime?
Is the proposed skill mix reasonable for the work required?
Does the contractor currently employ workers in all proposed labor categories?
Position description Position class
Direct labor position Position classification plan [Show Less]