AACE International Certified Cost Professional (CCP) Exam Practice Test

Answer : C

The problem provides key metrics used in Earned Value Management (EVM):

Earned Value (EV): $1,500,000

Actual Cost (AC): $1,000,000

Planned Value (PV): $2,000,000

Key Points:

Schedule Performance Index (SPI):

SPI = EV / PV = $1,500,000 / $2,000,000 = 0.75

An SPI less than 1 indicates the project is behind schedule.

Cost Performance Index (CPI):

CPI = EV / AC = $1,500,000 / $1,000,000 = 1.5

A CPI greater than 1 indicates the project is under budget.

Conclusion: The correct answer is C. Project is behind schedule, but under budget because the SPI indicates a delay in schedule, and the CPI shows that the project is currently spending less than planned.

Answer : A

When a project plan is implemented, one of the primary objectives is to ensure that all activities are executed according to the plan. This involves monitoring and controlling activities against the project baseline, which is the original plan plus any approved changes. Monitoring and control are critical processes in project management that involve tracking the progress of the project, identifying variances from the plan, and taking corrective actions when necessary.

Key Points:

Monitoring and Controlling:

Activities are monitored against the project baseline to ensure they are on track in terms of scope, time, and cost.

Control mechanisms are implemented to correct any deviations from the baseline, ensuring that the project objectives are met.

Other Options:

Formalizing Payment Applications: This is related to the financial aspect but not directly linked to the overall project monitoring and control.

Forward and Backward Pass: These are scheduling techniques used during the planning phase, not during the implementation phase.

CPI and SPI Calculation: These are performance metrics calculated during the project, but they are part of the monitoring and control process.

Conclusion: The correct answer is A. Activities are carefully monitored and controlled against the baseline because this is the primary focus during the implementation phase of the project plan.

Answer : D

In a Lump-Sum/Fixed-Price contract, the contractor agrees to complete the work for a set price, regardless of the actual costs incurred. This type of contract is often used when the project scope is well-defined, and the contractor has the freedom to choose methods and resources to complete the work within the agreed price.

Key Points:

Lump-Sum/Fixed-Price Contract:

The contractor has full responsibility for carrying out the project within the agreed-upon price.

The contractor is incentivized to control costs and manage resources efficiently because any cost overruns will reduce their profit margin.

Other Contract Types:

Guaranteed Maximum Price (GMP): The contractor is reimbursed for costs up to a maximum limit. Any costs above this limit are the contractor's responsibility.

Cost Reimbursable/Fixed Fee: The contractor is reimbursed for actual costs incurred, plus an additional fee, which might be a fixed amount or a percentage of the costs.

Measured Unit Price: Payment is made based on the actual quantity of work completed, with predefined rates for each unit.

Conclusion: The correct answer is D. Lump-sum/Fixed price as this contract type gives the contractor the freedom to choose their methods and resources to complete the project, with a focus on efficiency to maximize profit within the fixed price.

Answer : A

In project management, the Critical Path Method (CPM) is used to determine the longest path of planned activities to the end of the project. This path determines the shortest possible duration to complete the project. The longest path in CPM is defined by the sequence of activities that have zero float (slack) and must be completed on time to avoid delaying the project.

Key Points:

Milestone Activities:

Milestones are significant points or events in the project timeline, representing the completion of a major phase or segment of the project.

They do not consume time or resources themselves and do not have a duration, so they do not contribute to the calculation of the longest path. Instead, they are used as reference points to mark significant events or deadlines within the project.

Activities with Lag:

Lags are intentional delays between activities, and while they can influence the start and finish of subsequent tasks, they do contribute to the determination of the longest path if those activities are on the critical path.

Activities with Short Durations:

Activities with short durations may still be on the critical path, as they can be linked sequentially to other critical tasks, thereby affecting the overall project duration.

Constraints, Resource Leveling, and Interruptible Activities:

These factors can affect the timing of activities and may extend or compress the critical path depending on the specific resource and scheduling constraints.

Conclusion: The correct answer is A. Milestone activities because these activities, being non-duration tasks, do not contribute to the calculation of the longest path. The focus should be on the tasks that consume time and resources and are interlinked in a way that affects the project's completion date.

Answer : A

In this problem, the key is to determine the Budgeted Cost of Work Performed (BCWP), which refers to the portion of the budget allocated for the completed work as of a particular point in time. The BCWP is also known as the Earned Value (EV). It is a critical measure in project management, particularly in the Earned Value Management (EVM) system, as it allows for a comparison between the planned progress and the actual progress of the project.

Given:

Baseline budget (Total Planned Budget or BAC): $1,000,000

Project duration: 12 months

Budgeted Cost of Work Scheduled (BCWS) for the first month: $108,000

Actual Cost of Work Performed (ACWP) for the first month: $100,000

Total physical progress: 9%

Steps to determine the BCWP:

Calculate the Planned Value (PV):

This is the value of the work planned to be completed by a specific time.

Here, PV for the first month is $108,000.

Determine the Actual Cost (AC):

The AC is the cost incurred for the actual work performed, which is $100,000 in this case.

Calculate the Earned Value (EV) or BCWP:

BCWP is calculated by multiplying the total physical progress by the Budget at Completion (BAC).

Given that the physical progress is 9%, the BCWP can be computed as:

BCWP=PhysicalProgressBAC\text{BCWP} = \text{Physical Progress} \times \text{BAC} BCWP=PhysicalProgressBAC BCWP=0.091,000,000=$90,000\text{BCWP} = 0.09 \times 1,000,000 = \$90,000BCWP=0.091,000,000=$90,000

Conclusion:

The Budgeted Cost of Work Performed (BCWP) for this project at the end of the first month is $90,000, which matches option A. This calculation is critical in project management for determining how much of the budgeted work has been actually completed, enabling accurate performance assessment against the project baseline.

Answer : D

To determine the late finish date of Activity 50 using the CPM method, you would consider the latest finish times of its successors. The path through the project network would lead to the calculation that the latest possible time that Activity 50 can finish without delaying the project is Day 37. Therefore, the correct answer is D. Day 37.

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Answer : D

Given that the average life span of the lithium battery is 24 months with a standard deviation of 2 months, we need to calculate the probability that the battery will last between 20 and 26 months.

Using the Z-score formula:

Z=XZ = \frac{X - \mu}{\sigma}Z=X

For 20 months: Z=20242=2Z = \frac{20 - 24}{2} = -2Z=22024=2

For 26 months: Z=26242=1Z = \frac{26 - 24}{2} = 1Z=22624=1

Looking up these Z-scores in the standard normal distribution table:

Z = -2 corresponds to approximately 2.28%

Z = 1 corresponds to approximately 84.13%

The probability that the battery will last between 20 and 26 months is approximately 84%.