Practice Test Geeks(CCM) Certified Cash Manager Practice Test
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Cost Management Flashcards

7 cards from real CCM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Cost Management flashcards as text

  1. A construction project experiences frequent scope creep. Which cost control tool is most effective for managing approved changes to the budget?

    Answer: A formal change management system with updated cost baseline

    A formal change management system ensures all scope changes are evaluated, approved, and reflected in an updated cost baseline.

  2. Which of the following is an example of an indirect construction cost?

    Answer: Project trailer and temporary facilities

    Indirect costs like temporary facilities support the overall project but cannot be attributed to a single specific work item.

  3. A project manager receives a cost variance (CV) of -$50,000. What does this indicate?

    Answer: The project is $50,000 over budget

    A negative cost variance (CV = EV - AC) means actual costs exceed earned value, indicating the project is over budget.

  4. What is the purpose of a 'cash flow forecast' on a construction project?

    Answer: To project when money will be spent and received to ensure liquidity

    A cash flow forecast predicts the timing of expenditures and revenues, helping to identify potential funding gaps and plan financing.

  5. Under which circumstances would a construction manager recommend 'fast-tracking' a project, and what cost implication does it carry?

    Answer: When schedule is compressed; it often increases costs due to parallel work and rework risk

    Fast-tracking overlaps sequential phases to compress schedule but typically increases costs due to coordination complexity and potential rework.

  6. In construction cost estimating, what does a 'unit price' estimate involve?

    Answer: Calculating costs based on quantities multiplied by cost per unit of work

    A unit price estimate multiplies measured quantities of each work item by an established unit cost, providing detailed cost breakdowns.

  7. A CCM candidate reviews a project's 'cost baseline' versus its 'cost budget.' What is the key difference?

    Answer: The cost budget includes management reserves, while the cost baseline does not

    The cost baseline is the approved time-phased budget excluding management reserves; adding management reserves yields the total cost budget.