Defense Acquisition University CLC CLC 056 CLC 056 (7 sets for the final exams) Complete questions and answers
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Defense Acquisition University CLC CLC 056 CLC 056 (7 sets for the final exams) Complete questions and answersDefense Acquisition University CLC CLC 056 CLC 056 (7 sets for the final exams) Complete questions and answersDefense Acquisition University CLC CLC 056 CLC 056 (7 sets for the final exams)...
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Analyzing Contract Costs Exam
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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]
Travel
Direct Material
G&A Overhead
Utilities
2) Which of these statements below is correct regarding the criteria for classifying a special test
equipment cost as an "other direct cost”? [Determine if the other direct costs are properly proposed]
Engineered, designed, fabricated, or modified to meet specific contract needs and cannot be used for
other contracts
An item (e.g., fixture, pattern, or gauge) that is necessary in aiding the development of a unique product
Engineered, designed, fabricated, or modified to meet not only the requirements of the current contract
but also the requirements of all other contracts
Developed and engineered by a subcontractor who is not currently working on another contract
3) Which of the following is an indirect cost pool? [Identify indirect cost pools and bases]
General and Administrative Expenses
Direct material
Assembly labor
Manufacturing labor
4) What two costs elements are required to calculate an indirect cost rate? [Identify the process of
calculating indirect cost rates]
Expense pool and Allocation base
Overhead rate and Expense base
Allocation Pool and Expense base
Allocation base and Overhead rate
5) Which of the following is a phase in the allocation cycle? [Identify the cost allocation cycle]
Final Allocation Phase
Interim Processing Phase
Adjustment on Rates Phase
Continuous Rate Application Phase
6) How is simple linear regression used? [Identify what regression analysis is] [Remediation Accessed
:N]
To make predictions about one dependent variable based on one independent variable
To make predictions about one dependent variable based on more than one independent variable
To calculate an estimate that demonstrates the most likely average value based on the data supplied
To ensure contractor’s estimates properly capture the reduction of labor costs associated with
repetitive production tasks
7) Which regression method assumes a linear relationship between the dependent and independent
variables? [Identify the different regression analysis methods]
Simple linear regression
Local regression
Segmented regression
Curvilinear regression
8) Identify the situation where you would use simple linear regression. [Identify contract pricing situations
where simple regression analysis should be considered]
Indirect cost rate analysis
Labor classification analysis
Facilities Capital Cost of Money calculation
Profit objective calculation
9) After completing the five-step Least-Best-Squares-Fit (LBSF) process in developing a regression
equation, you must evaluate which two aspects of the equation? [Identify the steps for using simple
regression analysis] [Remediation Accessed :N]
"Goodness" of the fit and statistical significance
Coefficient of determination and the median
Prediction interval and significance level
Standard error of the estimate and the mean
10) Which situation below would you use improvement curve analysis to evaluate proposed costs?
[Identify situations where improvement curve analysis would be appropriate]
Assembly line with high proportion of manual labor
Fully automated assembly line
Production facility specializing in “one-off” or unique item production
Fabrication plant that generates 100,000 units per month
11) What is the first step in conducting improvement curve analysis? [Identify the steps for using
improvement curve analysis]
Collect the historical data
Calculate the rate of improvement
Calculate the slope of the curve
Determine the Theoretical value of unit #1
12) Given the improvement curve data, calculate the cost objective for unit #8.
Labor hours for unit #4: 120 hours
Labor hours for unit #1: 160 hours
Rate of improvement: 10%
Improvement curve slope: 90%
[Calculate an objective using improvement curve analysis]
108
12
16
144
13) How is the Treasury Rate applied in calculating Facilities Capital Cost of Money (FCCOM)?
[Recognize elements affecting facilities capital cost of money] [Remediation Accessed :N]
Divided into the FCCOM total amount
Treasury rate is not used in calculating FCCOM
Multiplied by the FCCOM total amount
Divided by the Weighted Guidelines profit objective
14) Which of the following statements is true concerning profit/fee calculations? [Identify the factors
affecting profit/fee analysis]
Profit/fee objectives are a product of risk
Profit/fee is calculated differently depending on DPAS rating of the contract
Profit/fee objectives are reduced by the cost efficiency factor
Profit/Fee is calculated once for the basic contract and must not be recalculated on subsequent
modifications
15) When is the working capital adjustment used while calculating profit/fee? [Calculate a profit/fee using
the appropriate structured approach]
On all fixed price contracts with progress payments
On all fixed price contracts
On all fixed price contracts with financing
On all fixed price contracts with performance based payments
16) What is the “base” that used in the calculation of the performance risk, contract type risk, and cost
efficiency factor when using the weighted guidelines to determine a profit/fee objective? [– Develop a pre-
negotiation position for profit or fee that is fair and reasonable.]
Subtotal of costs
Total price
Direct and Indirect costs
17) Which of the following factors is critical to a successful negotiation? [Identify factors that contribute to
success in any negotiation]
Effectively prepare, plan, and communicate
Avoid being too friendly, in case the negotiations get difficult
Set your opening position extremely low to give room to negotiate
The negotiation should be competitive
18) What is the negotiation term that reflects each party emphasizing the long term effects and benefits as
well as both parties defining their interests to be achieved in conjunction with the outcome? [Identify key
terms involved during a contract negotiation]
Win-Win
Win-Lose
Lose-Lose
Win-Lose-Win
19) What is an important driver to a successful negotiation? [Identify the importance of understanding cost
drivers to ensure a successful outcome]
Listen to understand
Ensure your position is heard
Maintain position of power
Obtain the lowest price for the government
20) Which of the following is the best strategy to mitigate cost risk? [Identify strategies to mitigate cost risk]
Conduct adequate market research prior to entering negotiations
Rely on the contractor’s proposed costs, supported by anecdotal data provided by the contractor
Evaluate other contract actions awarded to the contractor you’re negotiating with
Establish a firm profit/fee percentage prior to entering negotiations
21) 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
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]
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