AACE International Certified Cost Professional (CCP) CCP Exam Questions

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Total 189 questions
Question 1

A major theme park is expanding the existing facility over a five-year period. The design phase will be completed one year after the contract is awarded. Major engineering drawings will be finalized two years after the design contract is awarded and construction will begin three years after the award of the design contract. New, unique ride technology will be used and an estimate will need to be developed to identify these costs that have no historical data.

The following question requires your selection of CCC/CCE Scenario 26(2.5.50.1.2) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

Select the statement that best describes the meaning of the +/-notations associated with an estimate. The actual cost is expected:



Answer : B

The +/- notations associated with an estimate indicate that the actual cost is expected to fall within the percentage range stated. This means that the final cost of the project is likely to be within a certain range above or below the estimated value, accounting for uncertainties and potential variations in the project's execution. This range gives a more accurate picture of the potential cost outcome, rather than assuming a fixed amount.


Question 2

An agricultural corporation that paid 53% in income tax wanted to build a grain elevator designed to last twenty-five (25) years at a cost of $80,000 with no salvage value. Annual income generated would be $22,500 and annual expenditures were to be $12,000.

Answer the question using a straight line depreciation and a 10% interest rate.

The following question requires your selection of CCC/CCE Scenario 17 (4.2.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

Depreciation (in the United States) is calculated in accordance with which of the following?



Answer : A

Given Scenario:

The question asks about the system used in the U.S. for calculating depreciation.

The Modified Accelerated Cost Recovery System (MACRS) is the current system used in the United States for calculating depreciation for tax purposes.


Question 3

Money is value. Having money when you need it is very important. Money can also be valuable when used wisely by knowing when to spend and when to conserve Also, planning now for future expenses can be a plus to the company rather than a debit.

There are several ways to capitalize money and spending. Basically there is the single payment method that has a compound amount factor and a present worth factor. There is the uniform annual series that has a sinking fund factor, capital recovery factor and also the compound amount factor and present worth factor. At this point, we can assure money is worth 10%.

The following question requires your selection of CCC/CCE Scenario 7 (4.8.50.1.1) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

Five years from now it is required the company have $100,000. How much money should be invested at the end of each year to reach this?



Answer : A

Given Scenario:

The company needs to have $100,000 in five years, and you need to determine how much should be invested at the end of each year.

This involves calculating the annuity payment using the formula:

P=FVr(1+r)n1P = \frac{FV \times r}{(1 + r)^n - 1}P=(1+r)n1FVr

where:

FV=100,000FV = 100,000FV=100,000

r=0.10r = 0.10r=0.10

n=5n = 5n=5

P=100,0000.10(1+0.10)51=10,0000.6105115,937P = \frac{100,000 \times 0.10}{(1 + 0.10)^5 - 1} = \frac{10,000}{0.61051} \approx 15,937P=(1+0.10)51100,0000.10=0.6105110,00015,937


Question 4

Which of the following is NOT an aspect of quality management?



Answer : C

Quality management encompasses several critical aspects that ensure a project's outputs meet the required standards and fulfill the client's needs. These aspects typically include:

Quality Assurance (QA): This refers to the systematic processes and procedures put in place to ensure that the project's outcomes meet the required quality standards. QA is proactive, focusing on preventing defects by improving processes.

Quality Planning: This involves identifying the quality standards relevant to the project and planning how to meet those standards. It is an essential early step in the project management process, ensuring that quality objectives are defined and documented.

Quality Control (QC): This is the process of monitoring specific project results to determine if they comply with relevant quality standards. QC is a reactive process that identifies and corrects defects in the final outputs.

Quality Checking is not a standard term in the context of formal quality management processes. While checking may occur during quality control or assurance activities, it is not recognized as a distinct, formal component of quality management, making it the correct answer as the aspect that does not belong to the set.


Question 5

A used concrete pumping truck can be purchased for $125,000. The operation costs are expected to be $65,000 the first year and increase 5% each year thereafter. As a result of the purchase, the company will see an increase in income of $100,000 the first year and 5% more each subsequent year. The company uses straight-line depreciation. The truck will have a useful life of five (5) years and no salvage value. Management would like to see a 10% return on any investment. The company's tax rate is 28%.

The return on investment at the end of the fifth year would be:



Answer : A

To calculate the return on investment (ROI) at the end of the fifth year, you consider the increase in income and the depreciation.

Depreciation per year:

Depreciation=InitialCostLife=125,0005=25,000\text{Depreciation} = \frac{\text{Initial Cost}}{\text{Life}} = \frac{125,000}{5} = 25,000Depreciation=LifeInitialCost=5125,000=25,000

Given the income increase and cost increase, over five years, it's expected that the compounded growth and tax benefits through straight-line depreciation should yield a return greater than the required 10%. Therefore, the correct answer is A. Greater than 10%.


Question 6

The following question requires your selection of CCC/CCE Scenario 2 (2.3.50.1.2) from the right side of your split screen, using the drop down menu, to reference during your response/choice of responses.

6,573 hours have been expended to date. Planned completion at this time is 60%. The project is determined to be 55% complete. How many hours have been earned?



Answer : A

To calculate the earned hours, you use the formula:

EarnedHours=TotalBudgetedHoursPercentComplete\text{Earned Hours} = \text{Total Budgeted Hours} \times \text{Percent Complete}EarnedHours=TotalBudgetedHoursPercentComplete

Given:

Total Budgeted Hours = 12,000 hours

Percent Complete = 55%

EarnedHours=12,0000.55=6,600hours\text{Earned Hours} = 12,000 \times 0.55 = 6,600 \text{ hours}EarnedHours=12,0000.55=6,600hours

So, the correct answer is A. 6,600 hours.


Question 7

______________can be defined as the determination of that course of action or combination of alternatives that yields either the lowest cost or the highest profit.



Answer : A

Economic optimization is the process of determining the course of action or combination of alternatives that yields the lowest cost or the highest profit. This concept involves analyzing various options to identify the one that maximizes financial returns or minimizes costs, typically using mathematical models and decision-making frameworks.

Option B: Simulation refers to creating a model to replicate the behavior of a system over time, which may be used in optimization but is not the definition of optimization itself.

Option C: Linear programming is a specific mathematical technique used for optimization but does not encompass the broader concept of economic optimization.

Option D: Dynamic programming is another mathematical approach to solving optimization problems but is again a specific technique rather than the overall process.

Therefore, A. Economic optimization is the correct answer as it encapsulates the concept of determining the most cost-effective or profitable course of action.


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