Cost Evaluation and Spending budget Essay

Chapter eight Cost Evaluation and Cost management 8. one particular True/False 1) Direct costs are individuals clearly assigned to the element of the job that produced the cost. Solution TRUE 2) Material is definitely an example of a cost that is continuing, variable and direct. Answer TRUE 3) An expedited cost is one which does not fluctuate with respect to their usage. Solution FALSE 4) An order of degree estimate is usually more accurate than the usual ballpark approximate. Answer BOGUS 5) Comparative estimates are more accurate than definitive estimations when placed on the same task. Answer THE CASE 6) A learning level of 90 means that for each and every doubling of output, the time required by activity is catagorized by 10. Answer PHONY 7) There exists a tendency for different departments or perhaps functions to compete intended for scarce assets in a zero-sum game when bottom-up budgeting is used to formulate a project finances. Answer FAKE 8) Activity-based costing is dependent on the notion that projects take in activities and activities take in resources. Solution TRUE 9) A time-phased budget allocates costs throughout both job activities as well as the anticipated time in which the budget is to be spent. Answer THE CASE 10) A budget contingency of 1 million on the 10 , 000, 000 project signifies that the task will be prepared for a expense of 10 , 000, 000, but the project organization gets an extra 1 million to guard against unforeseen cost overruns. Answer FALSE 8. a couple of Fill in the Blank 1) Employing an overhead multiplier is sometimes known as the __________ rate pertaining to direct labor costs. Response fully-loaded 2) __________ costs might be these associated with costs applied when at the beginning or perhaps end of any project. Answer non-recurring 3) Unplanned costs incurred when ever steps will be taken to speed up the assignments completion will be __________. Response expedited costs 4) The unofficial guideline for __________ estimates is always to aim for a great accuracy of plus or perhaps minus 40. Answer ballpark or order of value 5) __________ cost quotes can only be provided upon the completion of almost all of the design am employed at a point when the scope and capabilities from the project happen to be well-understood. Answer Definitive 6) Cost quotes can be too low if concerns outside a firms control affect the task organizations capability to complete the project. These kinds of __________ may possibly include inflation or political instability. Solution external factors 7) The __________ is known as a plan that identifies the allocated methods, the jobs goals, plus the schedule that enables an organization to accomplish those goals. Answer job budget 8) __________ starts with the work packages from the work malfunction structure and specifies funds that are required to support the tasks. These costs are aggregated by managers and identical costs happen to be removed since managers finances are combined. Answer Bottom-up budgeting 9) Activity-based priced at is a spending budget method that identifies __________ associated with actions that consume resources. Solution cost individuals 10) __________ is typically put into the jobs budget following the identification of project costs that is, the project does not include __________ as part of the activity-based charging process. Solution Contingency money (funds), a contingency 8. several Multiple Choice 1) Which will of the following is a direct cost A) labor B) rent C) depreciation on equipment D) health benefits 2) Which staff wages could constitute an immediate cost for the construction project A) the projects cost accountant B) the brick mason C) the designers assistant D) the foremans 3) 3 workers complete a full 8-hour day polishing off concrete for a terrace. All three workers will be paid 12 an hour and the job charges to the customer intended for 450. Exactly what are the total direct labor costs A) 450 B) doze C) 288 D) 96 4) Which in turn of these roundabout costs is normally classified since an overhead cost A) advertising B) shipping C) sales commissions D) taxation 5) Which in turn of these indirect costs is typically classified as being a...



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