The sum of the practices and processes that an enterprise uses to manage the total life cycle cost investment in its portfolio of strategic assets is called _________ - Answer- Total Cost Management
______ is the application of scientific principles and techniques to problems of :
- estimation...
the sum of the practices and processes that an ent
is the application of scientific principles
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AACE CCT PRIMER QUESTIONS AND ANSWERS
The sum of the practices and processes that an enterprise uses to manage the total life
cycle cost investment in its portfolio of strategic assets is called _________ - Answer-
Total Cost Management
______ is the application of scientific principles and techniques to problems of :
- estimation
- cost control
- business planning & management science
- profitability analysis
- project management
- planning & scheduling - Answer- Cost Engineering
_______ Is the value of an activity or asset. Generally, this value is determined by the
cost of the resources that are expended to complete the activity or produce the asset.
An example would be the facilities needed to produce an activity or asset, which would
include the tooling, electricity, taxes, and maintenance, etc., necessary to keep the
facility available for use. Other costs might be office supplies, communication costs,
travel costs, and security costs - Answer- Cost
Any consumable, except time, required to accomplish an activity are considered
_______. From a total cost and asset management perspective, _______ may include
any real or potential investment in strategic assets including time, monetary, human,
and physical. - Answer- Resources, Resources
A resource becomes a cost when it is ______ or consumed in an _____or project -
Answer- invested, project
Material, labor, and "other" are categories of _________. - Answer- Resources
The product lifecycle is the complete history of a product through its ______, definition,
production, operation, and obsolescence /______ phases. - Answer- concept, disposal
The distinction between product life cycle and project life cycle is that the latter does not
include the ______ and ______. - Answer- operation, disposal
___________ is the systematic numeric method of classifying various categories of
costs for accounting purposes - Answer- Code of Accounts
______ is used used in situations where each job is different and is performed to the
customer's specifications. ______ involves keeping an account of direct costs (labor,
machine time, raw materials) and indirect costs (overheads) - Answer- Job Costing, Job
Costing
,A process is a sequence or independent & linked procedures which ___________ to
convert inputs into outputs. These outputs then serve as inputs for the next stage until a
known goal or end result is reached - Answer- consume resources
A _____ is a good, idea, method, information, object, service, etc, that is the end result
of a process & serves as a need or want satisfierProduct - Answer- Product
Product manufactured along with a different product, in a process in which both are
required in the production of another product are considered _____ - Answer- Co-
products
A key feature of a ____ is that it has low value in comparison with the principal
product(s) & may be discarded or sold - Answer- by-product
Types of Manufacturing Operations include _____, ______ run and _____ shop -
Answer- Process, Batch, Job
This manufacturing operation runs almost continuously making the same thing.
Examples are refining and chemical plants, and very long run assembly operations. -
Answer- Process
A ______ characterized by setting up for one product, producing a set quantity of
product, and then shutting down to change over to producing another product. -
Answer- Batch Run
A _______ Similar to a batch run operation, except that you only produce 1 of the item.
Each job results in a customized product. Examples are metal fabrication, prototype,
fabrication. - Answer- job shop
Roles such as executive/senior management, legal, HR, business development, etc.
These roles are the farthest removed from the actual production of discrete product at
the various facilities. They are shared across many production locations and considered
______. - Answer- overhead
______ are field/plant support personnel, located at the site. These resources help the
operation run smoothly. These are people like local payroll, facility maintenance, site
project controls, site senior (office-based) supervisors and management who are shared
across the various products the particular location produces. - Answer- Indirects
_______are the remote location people directly involved in producing the product.
These are the easiest to correlate their effort to a particular product. First line
supervisors are also normally considered ______. - Answer- Directs
The owner approaches cost from a _____ point of view. Owners not only consider the
cost of the construction, or process, but ______ supervision
, and overhead, implementation costs, cost of money, furniture, fixtures, equipment( FFE)
and other considerations - Answer- holistic, internal
Contractors, subcontractors, suppliers only consider their part of the _______ and are
responsible for that alone. - Answer- Project costs
Appraising or estimating the worth of something having economic or monetary value is
the general description of ________. - Answer- valuation
Valuation in _______ is the determination of the worth of the asset or that which has
been damaged or lost - Answer- insurance, insured
Valuation in ________ is the determination of the dutiable value of imports by the
customs authorities. - Answer- International Trade
A(n) _________ represents the foregone benefit by choosing one alternative over
another - Answer- Opportunity cost
There is a relationship between time and the opportunity to influence a projects cost.
The more time that has elapsed, the ____ the chance to alter the cost. It is important to
make the cost effective decisions ______ in a project or process to have the most
influence on cost. - Answer- less, early
________focuses on external reporting. Maintain the balance sheet (assets and
liabilities) and generate income (revenues less expenses) and tax statements for the
organization _________. Only look at indirects costs as a whole, not broken out to
individual products or departments. - Answer- Managerial Accounting, as a whole
In cost accounting the focus is on ___________, and their product is often proprietary.
Determine how much it is costing the organization to produce a particular product.
Looks at appropriate allocation of overhead and indirect costs to only include those
______ to the product. - Answer- internal reporting, directly applicable
Impact of "One Size Fits All" Allocation - Answer- Easy to come up with and ensure
100% allocation of the overhead costs, usually don't reflect what is truly needed to
produce that organizational deliverable. In the "one size fits all" approach, overhead and
indirect costs and forced DOWN onto the product.
Activity Based Costing - Answer- A production process is broken down into
ACTIVITIES. Typical nomenclature is an "action verb-adjective-noun" grammar
convention(inspect defective products, open new customer accounts).
Operating Costs - Answer- Expenses incurred during the normal operation of a facility
including labor, materials, utilities, and other related costs. Examples: fuel, lubricants,
scheduled part changes, building maintenance, cleaning services, taxes
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