Business Strategy Quiz

Certified Cost Technician Practice Exam

• This is a practice exam with 100 multiple-choice questions and answers.
• The exam is designed to test knowledge and understanding of concepts.
• This is not the actual Certified Cost Technician exam.
• The book's author is not affiliated with the certification organization.
• Passing the practice exam does not guarantee passing the actual exam.
• A passing score of 50% or below on the practice exam significantly reduces the chance of passing the real exam.

Question Examples

• Question 1: In slow construction cycles, contractors often price jobs at or just below cost to keep their workforce employed and active in the market. This is an example of At Cost Pricing. Answer: A
• Question 2: The objective of developing or designing a facility or item is to yield the least lifecycle costs or provide the greatest value while meeting performance criteria. This is Value Engineering. Answer: A
• Question 3: Material Costs and Labor Costs are considered direct costs. Overhead Costs and Subcontract Costs are not. Answer: C
• Question 4: Depreciation, advertising, professional fees are examples of Home Office Overhead. Mobilization isn't. Answer: D
• Question 5: The cost expended solely for completing activities or assets for a project is called Direct Cost. Answer: A
• Question 6: Direct costs can be fixed or variable, and are the cost of materials needed for a product manufacture - not Overhead Costs. Answer: D
• Question 7: Market Value fluctuates with buyer/seller willingness and conditions. Answer: B
• Question 8: Travel time, shortened shift time, and show-up pay are Premium Pays, while wage rate is not. Answer: D
• Question 9: An estimate expected to be accurate within +15% or -5% is an Order-of-Magnitude Estimate. Answer: C
• Question 10: Procurement and marketing are not part of Job Site Overhead. Answer: D
• Question 11: Indirect costs are not directly accountable to a specific activity or asset; they are also called Overhead Costs. Answer: C
• Question 12: Mean is the best known and most reliable measure of central tendency. Answer: A
• Question 13: Subcontract Costs are prices for parts of a project the main contractor won't complete with its own resources. Answer: C
• Question 14: Escalation is a provision for an increase in equipment, materials, labor etc. over contract costs due to changing prices. Answer: C
• Question 15: Reliability is the measurement of "goodness" of an inference. Answer: C
• Question 16: Exceptions are items to document that are related to the project but aren't reflected in the estimate. Answer: A
• Question 17: Overhead costs are inherent expenses not directly tied to a specific part of the project, product, or asset. Answer: B
• Question 18: The middle point of a distribution where half the values are above and half are below is the Median. Answer: C
• Question 19: Fabricated Materials are based on shop drawings. Answer: A
• Question 20: Exceptions are anomalies or variances from the organization's standard estimating practices to identify. Answer: A
• Question 21: Book Value is the value of outstanding shares determined by the number of shares outstanding. Answer: A
• Question 22: Contingency is an amount added to allow for discretionary management purposes outside of the project scope. Answer: B
• Question 23: Benchmarking is comparing overall estimates with similar projects, historical data, and industry data. Answer: A
• Question 24: Operating Profit is the earnings from an ongoing business after deducting direct and indirect costs of goods sold. Answer: C
• Question 25: Sensitivity Analysis is testing the outcome of analysis by changing one or more parameters from an initially assumed value. Answer: C
• Question 26: Performance Bonds are insurance policies for work completion. Answer: C
• Question 27: Penalty is an amount of money in the contract for failure to complete work on time. Answer: D
• Question 28: Ideation is part of the Project Life Cycle; it is not one of the typical Project Life Cycle stages. Answer: A
• Question 29: An organization created for compensation and working conditions interests is called a Union. Answer: C
• Question 30: Leasing does not offer a minimal upfront cash outlay as an advantage. Answer: B
• Question 31: Modeling creates a physical or mathematical representation of an object, system, or a problem. Answer: A
• Question 32: Mean is used most often in large data sets, such as for reporting test scores, ages, or salaries. Answer: A
• Question 33: Indirect costs are not directly assigned to a product or process, often allocated by a predetermined basis. Answer: D
• Question 34: Reserves are resources to cover undefined requirements for an activity, work item, account, or sub-account. Answer: A
• Question 35: Normal distributions are bell-shaped and symmetrical about the mean, with the mean, median, and mode being equal. Answer: B
• Question 36: Orderly liquidation value is the probable price of capital assets and equipment in a six-month sale, with adequate funds for remarketing. Answer: C
• Question 37: Depreciation is not an example of a fixed cost. Answer: D
• Question 38: Contingency is the amount to include in the estimate when conditions or events are uncertain and are expected to add to the cost. Answer: B
• Question 39: Present Value refers to the value of a benefit or cost in the future, considering the time value of money. Answer: C
• Question 40: Monte Carlo Method is a simulation technique used to determine the range or optimal value of a series of mathematical expressions. Answer: D
• Question 41: The total original value of physical facilities is fixed capital. Answer: D
• Question 42: Activity-Based Costing uses relationships in contrast to broad averages and arbitrary guesses. Answer: A
• Question 43: Scrap value is the money value of equipment in a timely auction. Answer: A
• Question 44: Simulation is the application of physical or mathematical models for observing and predicting actual performance to which it relates. Answer: A
• Question 45: Present Value is considering the time value of money for future cost (or benefit). Answer: C
• Question 46: Cost is the money amount for goods and services received in a project. Answer: B
• Question 47: Undesirable products are By-Products. Answer: A
• Question 48: Inflow and outflow of funds are recorded as Cash Flow. Answer: D
• Question 49: Delivery schedule isn't a management cost of materials. Answer: D
• Question 50: Statistics is a mathematical science of collecting, analyzing, and presenting data. Answer: A
• Question 51: Market Penetration Pricing is widely promoting a product at a lower introductory price. Answer: A
• Question 52: Replacement Costs are the adjusted cost of similar items, considering utilities and adjustments (discounts). Answer: A
• Question 53: T-tests are for testing population means. Answer: B
• Question 54: Depreciation is the form of capital recovery for assets with a life span of over a year, periodically charging a portion of the asset's value to current operations. Answer: C
• Question 55: Median is not a measurement of dispersion. Answer: C
• Question 56: Marketing is not a variable cost. Answer: C
• Question 57: Descriptive Statistics is used, not Inferential Statistics. Answer: B
• Question 58: Descriptive Statistics is used to study the efficiency. Answer: B
• Question 59: Scrap Value is the commodity value of equipment. Answer: A
• Question 60: Kurtosis measures the heaviness of the tails of a distribution. Answer: A
• Question 61: Predatory Pricing is selling below survival prices to eliminate competition. Answer: D
• Question 62: Range is the difference between the highest and lowest scores in a distribution. Answer: B
• Question 63: Internal Rate of Return is the compound rate that equals the time value of a projects costs/benefits. Answer: A
• Question 64: Statistical Inference is estimation, prediction, or generalization of a population based on sample data. Answer: D
• Question 65: Chi-squared tests are for assessing how well a theoretical distribution fits an empirical distribution. Answer: C
• Question 66: Opportunity costs are the benefits that could have been received by taking an alternative action. Answer: B
• Question 67: Standard Deviation measures how much each score deviates from a distributions mean. Answer: C
• Question 68: Skewness measures the lack of symmetry in a probability distribution. Answer: B
• Question 69: Profit isn't an indirect cost. Answer: C
• Question 70: Maintenance being in-house is not an exception to renting advantages. Answer: D
• Question 71: Chi-Squared isn't an item that affects purchase costs of materials. Answer: D
• Question 72: Probability refers to the measure of the likelihood of an event. Answer: B
• Question 73: Regression Analysis provides a best-fit mathematical equation. Answer: A
• Question 74: Range, which is not a measure of location, is the difference between the highest and lowest scores. Answer: D
• Question 75: Salvage Value is the money value a buyer would pay at an auction of equipment for repair or replacement. Answer: D
• Question 76: Mode is the value that occurs most often in a data set. Answer: B
• Question 77: Economic value reflects the importance of a property as an economic means to an end rather than an end in itself. Answer: A
• Question 78: Contingency is expected to be reserved as part of an estimate. Answer: C
• Question 79: Fringe benefits are indirect costs. Answer: A
• Question 80: The midpoint of the modal class is defined as the mode, not mean. Answer: A
• Question 81: Estimates are often based on historical cost data of previous projects. Answer: A
• Question 82: Reliability of direct costs increases as indirect costs decrease. Answer: B
• Question 83: Median is the middle value of an even number of observations. Answer: A
• Question 84: Home Office overhead does not relate to a specific project. Answer: A
• Question 85: A mode in statistics does not always exist or be unique. Answer: A
• Question 86: Escalation refers to an increase in cost over time. Answer: C
• Question 87: Fixed costs do not vary with production volume. Answer: C
• Question 88: Quartile deviation is more stable than range because of its measure based on centers of distribution rather than extremes. Answer: A
• Question 89: Larger standard deviation means a wider spread of values from the mean. Answer: A
• Question 90: Tool costs for construction are indirect variable costs. Answer: C
• Question 91: Normal distributions have a kurtosis of 3. Answer: A
• Question 92: Quantitative data defines, qualitative data describes. Answer: A
• Question 93: Life-Cycle Costing uses historical information to estimate resource costs. Answer: A
• Question 94: Producing more goods than the breakeven point generates profit. Answer: B
• Question 95: Raw Materials are materials that require the minimum amount of processing. Answer: A
• Question 96: Rate of Return is the ratio of money gained or lost relative to the amount invested. Answer: D
• Question 97: Just-In-Time inventory is used in inventory technique as a 0% of inventory. Answer: A
• Question 98: Expediting ensures materials are delivered on-time. Answer: D
• Question 99: Work Sampling is a technique to determine unit rates for specific work activities. Answer: A
• Question 100: Fair Value is the price when a willing buyer and a willing seller transaction occurs with neither being compelled, having reasonable knowledge. Answer: A

Answer Key

• A detailed answer key is provided and referenced by question number.

Test your knowledge on essential business strategies and components involved in effective planning. This quiz covers key concepts like marketing strategies, budgeting, and customer engagement. Perfect for aspiring entrepreneurs and business students!