I85PREP
⌘ K
AACE CCP study materials
AACE CCP study resources

AACE CCP practice questions

One question at a time. Build your AACE CCP understanding.

First 50 of 200 questions. Each one lists the choices, the correct answer, and an explanation. The checker at the top of this page saves progress in this browser when it is available.

Continue in the practice tool above to load more questions, 50 at a time.

Question 1Cost Estimating

Which AACE International estimate class typically has the widest expected accuracy range?

  1. Class 3
  2. Class 1
  3. Class 2
  4. Class 5 Correct answer.

Explanation

Class 5 is the least-defined estimate class and has the widest expected accuracy range, commonly about -20% to -50% on the low side and +30% to +100% on the high side. Accuracy narrows as project definition increases toward Class 1.

Question 2Cost Estimating

At a very early stage, a similar completed project's cost is available but little design detail exists. Which estimating method is most appropriate?

  1. Bottoms-up work package build
  2. Crew-day scheduling
  3. Analogous estimating Correct answer.
  4. Detailed quantity takeoff

Explanation

Analogous estimating scales the known cost of a similar historical project to the new project, making it suitable when definition is low. Detailed methods require information that is not yet available.

Question 3Cost Estimating

A definitive estimate prepared after complete engineering and design corresponds most closely to which AACE estimate class?

  1. Class 3
  2. Class 1 Correct answer.
  3. Class 4
  4. Class 5

Explanation

Class 1 estimates are prepared with essentially complete project definition and are used for definitive or control purposes. Lower classes reflect progressively less design information.

Question 4Cost Estimating

Contingency in a project cost estimate is best described as:

  1. A fee paid to the contractor for overhead and profit
  2. An allowance for known-unknowns within project scope Correct answer.
  3. An amount included only for general escalation
  4. A reserve held outside the project for unknown-unknowns

Explanation

Contingency is included in the project estimate to cover known-unknowns and expected growth within the approved scope. It is distinct from management reserve, which addresses unknown-unknowns outside the scope baseline.

Question 5Cost Estimating

Which cost is normally classified as an indirect cost in a construction estimate?

  1. Concrete materials
  2. Structural steel
  3. HVAC equipment
  4. Site supervision Correct answer.

Explanation

Indirect costs are those not directly attributable to a specific work item, such as site supervision, temporary facilities, and general overhead. Materials and equipment installed in the work are typically direct costs.

Question 6Cost Estimating

A historical cost of $2,000,000 was incurred with a cost index of 150. What is the indexed cost for a similar project when the index is 180?

  1. $2,400,000 Correct answer.
  2. $3,600,000
  3. $1,666,667
  4. $2,160,000

Explanation

The indexed cost equals the historical cost multiplied by the new index divided by the old index: $2,000,000 × (180 / 150) = $2,400,000. This adjusts for the change in the cost index.

Question 7Cost Estimating

The six-tenths rule estimates cost from capacity using which exponent?

  1. 1.0
  2. 0.5
  3. 0.4
  4. 0.6 Correct answer.

Explanation

The six-tenths rule uses an exponent of 0.6 to reflect the economies of scale between facilities of different capacities. Cost is scaled by the capacity ratio raised to that exponent.

Question 8Cost Estimating

A learning curve in cost estimating describes:

  1. The increase in labor rates due to escalation
  2. The decline in overhead rate over project duration
  3. The fall in average labor hours as output doubles Correct answer.
  4. The change in material cost as production volume rises

Explanation

A learning curve represents the improvement in labor productivity as cumulative output increases, usually expressed as a percentage reduction in average labor hours each time cumulative production doubles. It applies to repetitive tasks.

Question 9Cost Estimating

A 100,000 tpy plant cost $50 million. Using a capacity exponent of 0.6, what is the estimated cost of a 200,000 tpy plant?

  1. $75.8 million Correct answer.
  2. $100.0 million
  3. $80.0 million
  4. $60.5 million

Explanation

Capacity factoring gives $50 million × (200,000 / 100,000)^0.6 = $50 million × 1.5157, or about $75.8 million. The exponent reflects economies of scale.

Question 10Cost Estimating

A $500,000 cost is expected at year 0. With 4% annual escalation compounded, what is the escalated cost after 3 years?

  1. $578,000
  2. $540,000
  3. $562,432 Correct answer.
  4. $560,000

Explanation

Escalation is applied as $500,000 × (1.04)^3 = $562,432. Compounding applies escalation to the previously escalated amount each year.

Question 11Cost Estimating

Which characteristic best defines a parametric estimate?

  1. It sums detailed work package costs from the WBS
  2. It relies only on the lowest historical bid
  3. It is prepared only after all shop drawings are complete
  4. It uses cost relationships tied to physical parameters Correct answer.

Explanation

Parametric estimating uses cost estimating relationships that link cost to measurable physical or performance parameters, such as capacity, weight, or throughput. It is useful when limited design detail is available.

Question 12Cost Estimating

Bottom-up estimating is best characterized by:

  1. Applying a single cost per unit of capacity
  2. Using the six-tenths rule on historical plants
  3. Summing detailed work package estimates Correct answer.
  4. Scaling a previous project by a location factor

Explanation

Bottom-up estimating builds the total cost by summing detailed estimates for individual work packages or tasks. It generally requires greater definition and effort than top-down methods.

Question 13Cost Estimating

In estimate development, the work breakdown structure (WBS) primarily provides:

  1. A hierarchy that ensures scope coverage for cost assignment Correct answer.
  2. A summary of accounting department overhead rates
  3. A schedule of contractor bid due dates
  4. A list of labor rates by trade

Explanation

The WBS decomposes project scope into manageable elements so that all work can be estimated and costs can be assigned consistently. It helps prevent omissions and duplication in the estimate.

Question 14Cost Estimating

The main purpose of a quantity takeoff is to:

  1. Assign overhead costs to each work package
  2. Calculate the project's internal rate of return
  3. Determine the contract payment terms
  4. Measure and list work quantities from drawings Correct answer.

Explanation

A quantity takeoff measures and lists the quantities of materials and work required, based on drawings and specifications. Those quantities then become the basis for pricing direct costs.

Question 15Cost Estimating

A crew of four workers installs 200 meters of pipe in an 8-hour day. What is the productivity in meters per labor-hour?

  1. 25.0
  2. 12.5
  3. 3.13
  4. 6.25 Correct answer.

Explanation

Productivity equals output divided by total labor-hours: 200 meters ÷ (4 workers × 8 hours) = 6.25 meters per labor-hour. Crew size must be included in the denominator.

Question 16Cost Estimating

A base estimate is $1,000,000. A location factor of 1.15 is applied. What is the adjusted estimate?

  1. $1,015,000
  2. $1,150,000 Correct answer.
  3. $850,000
  4. $1,250,000

Explanation

The adjusted estimate is $1,000,000 × 1.15 = $1,150,000. A location factor scales costs from a reference location to the project location.

Question 17Cost Estimating

Which statement best distinguishes contingency from management reserve?

  1. Contingency is profit; reserve is overhead
  2. Contingency covers unknown-unknowns; reserve covers known-unknowns
  3. Contingency is escalation; reserve is contingency
  4. Contingency covers known-unknowns; reserve covers unknown-unknowns Correct answer.

Explanation

Contingency is included within the project scope to cover known-unknowns, while management reserve is held for unknown-unknowns that fall outside the scope baseline. The two allowances address different levels of uncertainty.

Question 18Cost Estimating

Using PERT, expected duration = (O + 4M + P) / 6. If O = 4 days, M = 6 days, and P = 14 days, what is the expected duration?

  1. 9 days
  2. 8 days
  3. 6 days
  4. 7 days Correct answer.

Explanation

The PERT expected duration is (4 + 4×6 + 14) / 6 = 42 / 6 = 7 days. The formula weights the most likely value four times.

Question 19Cost Estimating

Monte Carlo simulation is used in cost estimating to:

  1. Replace the WBS with a probability table
  2. Model the combined effect of multiple cost uncertainties Correct answer.
  3. Select the lowest of three independent estimates
  4. Eliminate all contingency from the estimate

Explanation

Monte Carlo simulation samples multiple uncertain cost inputs together to produce a probability distribution of total project cost. That distribution supports contingency and risk analysis.

Question 20Cost Estimating

A common purpose of an independent estimate check is to:

  1. Replace the detailed estimate with a historical average
  2. Validate reasonableness against benchmarks or another method Correct answer.
  3. Set the project's accounting depreciation schedule
  4. Satisfy the contractor's bid bond requirement

Explanation

An independent check tests whether the estimate is reasonable by comparing it with historical metrics, another estimating method, or a peer review. It does not replace the primary estimate.

Question 21Cost Estimating

An 80% learning curve applies. The first unit takes 100 labor-hours. What is the cumulative average labor-hours per unit for the first four units?

  1. 100 hours
  2. 51.2 hours
  3. 64 hours Correct answer.
  4. 80 hours

Explanation

With an 80% curve, the cumulative average falls to 80% of the prior average each time cumulative output doubles. From 1 to 2 units the average is 80 hours, and from 2 to 4 units it is 80 × 0.8 = 64 hours.

Question 22Cost Estimating

Risk A has a 20% probability and a $100,000 cost impact. Risk B has a 10% probability and a $300,000 impact. What is the expected value of these risks for contingency planning?

  1. $400,000
  2. $30,000
  3. $80,000
  4. $50,000 Correct answer.

Explanation

Expected value is the probability-weighted impact: 0.20 × $100,000 = $20,000, plus 0.10 × $300,000 = $30,000, for a total of $50,000. This value can inform the risk-based contingency allowance.

Question 23Cost Estimating

An AACE Class 2 estimate is typically prepared when project definition is in which range?

  1. 10% to 40%
  2. 0% to 2%
  3. 65% to 100%
  4. 30% to 75% Correct answer.

Explanation

AACE Class 2 estimates generally correspond to project definition of about 30% to 75%. This class is more definitive than Class 3 but less complete than Class 1.

Question 24Cost Estimating

A process unit cost $2.5 million in a region with a location factor of 1.00. What is the estimate in a region with a location factor of 1.18 after applying an escalation factor of 1.05?

  1. $2.63 million
  2. $3.54 million
  3. $2.95 million
  4. $3.10 million Correct answer.

Explanation

The adjusted cost is $2.5 million × 1.18 × 1.05 = $3.0975 million, or about $3.10 million. Location and escalation factors multiply together when both apply.

Question 25Cost Estimating

Sensitivity analysis is most useful in cost estimating because it:

  1. Removes the need for historical cost data
  2. Guarantees the estimate will not exceed budget
  3. Sets the contractor's profit percentage
  4. Identifies which inputs most affect total cost Correct answer.

Explanation

Sensitivity analysis tests how changes in individual inputs affect the total estimate, highlighting the variables that deserve the most attention. This helps focus risk analysis and contingency development.

Question 26Cost Estimating

Which AACE estimate class is prepared with the least project definition and has the widest expected accuracy range?

  1. Class 5 Correct answer.
  2. Class 3
  3. Class 1
  4. Class 2

Explanation

Class 5 is an order-of-magnitude estimate prepared with minimal project definition and therefore carries the widest accuracy range. As project definition improves, estimates progress toward Class 1, which is the most definitive.

Question 27Cost Estimating

Which estimating method develops a cost by adjusting historical data from one similar completed project to the current project?

  1. Bottom-up estimating
  2. Unit-rate estimating
  3. Analogy estimating Correct answer.
  4. Parametric estimating

Explanation

Analogy estimating uses a comparable completed project as the basis and adjusts for differences in size, location, time, or scope. Parametric estimating uses statistical relationships between cost and physical parameters, while bottom-up and unit-rate methods build from detailed quantities or rates.

Question 28Cost Estimating

In a project cost estimate, indirect costs are best described as:

  1. Costs that are always excluded from the total installed cost
  2. Costs that can be traced directly to a specific deliverable
  3. Costs incurred only after project closeout
  4. Costs that are not directly attributable to a specific deliverable Correct answer.

Explanation

Indirect costs support the overall project but are not directly traceable to a single deliverable, such as site supervision or temporary facilities. Direct costs are those that can be attributed to a specific permanent item or work package.

Question 29Cost Estimating

The basis of estimate document primarily serves to:

  1. Provide the final as-built cost after project completion
  2. List only the craft labor rates used in the estimate
  3. Document assumptions, exclusions, and estimating methods Correct answer.
  4. Replace the need for a detailed work breakdown structure

Explanation

The basis of estimate records how the estimate was developed, including scope basis, assumptions, inclusions, exclusions, data sources, and methods. It supports review and reconciliation but does not replace the WBS or provide as-built cost.

Question 30Cost Estimating

A project has an equipment cost of $1.2 million. Using a Lang factor of 4.0 for a fluid processing plant, what is the estimated total installed cost?

  1. $3.0 million
  2. $1.8 million
  3. $6.0 million
  4. $4.8 million Correct answer.

Explanation

A Lang factor multiplies delivered equipment cost to estimate total installed cost. The calculation is $1.2 million × 4.0 = $4.8 million.

Question 31Cost Estimating

A craftsperson has a base wage of $30.00 per hour. Fringe benefits, insurance, and payroll taxes add 35% to the base wage. What is the fully burdened labor rate?

  1. $40.50 per hour Correct answer.
  2. $34.50 per hour
  3. $45.00 per hour
  4. $30.35 per hour

Explanation

The fully burdened rate equals the base wage multiplied by one plus the burden percentage: $30.00 × 1.35 = $40.50 per hour. The burden is a percentage of wage, not a flat dollar addition.

Question 32Cost Estimating

An allowance in a cost estimate is most appropriately used to:

  1. Replace contingency for unidentified risks
  2. Adjust historical costs for currency exchange differences
  3. Account for management reserve above the project budget
  4. Cover known scope with undefined quantities or details Correct answer.

Explanation

An allowance covers known scope that cannot yet be quantified or detailed fully, such as an expected quantity of bulk material. Contingency addresses unidentified risks, and management reserve sits above the project budget.

Question 33Cost Estimating

Estimate reconciliation is best described as:

  1. Preparing a single estimate without any independent review
  2. Comparing estimates or versions and resolving their differences Correct answer.
  3. Replacing detailed quantities with a capacity factor
  4. Applying a location factor to convert a base estimate

Explanation

Reconciliation compares estimates, estimate versions, or independent checks and explains or resolves the differences. It is a review and alignment activity, not a method of generating a single unreviewed estimate.

Question 34Cost Estimating

Unit-rate estimating is most suitable when:

  1. The estimate must exclude all indirect costs
  2. A single historical project is the only cost data source
  3. Work can be measured in units and reliable rates per unit are available Correct answer.
  4. The project scope is undefined and only order-of-magnitude accuracy is needed

Explanation

Unit-rate estimating applies known rates to measured quantities, so it requires defined work and credible unit rates. It is not intended for undefined scope, single-project analogy, or excluding indirect costs.

Question 35Cost Estimating

Which effect should an estimator typically consider when significant overtime is planned?

  1. No change to labor cost if the base wage rate stays the same
  2. Reduced productivity and higher labor cost per unit of work Correct answer.
  3. Elimination of the need for construction indirect costs
  4. Lower labor cost because more hours are worked per day

Explanation

Overtime usually adds premium pay and can reduce productivity through fatigue and congestion, raising labor cost per unit of work. The base wage rate alone does not capture overtime premiums or productivity loss.

Question 36Cost Estimating

Which of the following is typically classified as a construction indirect cost?

  1. A major pump that is tagged as equipment
  2. Site supervision and temporary construction facilities Correct answer.
  3. Pipe rack steel that is part of the final plant
  4. Structural steel permanently installed in the facility

Explanation

Construction indirect costs support the construction effort but are not permanent deliverables, such as site supervision and temporary facilities. Permanent steel, tagged equipment, and pipe rack steel are direct permanent components.

Question 37Cost Estimating

Range estimating is intended to:

  1. Eliminate contingency from the estimate
  2. Express cost as a probability distribution or confidence range Correct answer.
  3. Set the project budget equal to the lowest possible cost
  4. Produce a single deterministic cost with no uncertainty

Explanation

Range estimating represents uncertainty by producing a cost range or probability distribution rather than one deterministic value. It supports setting contingency and confidence levels but does not eliminate contingency or set budget at the lowest possible cost.

Question 38Cost Estimating

Equipment is purchased for €2.5 million. The exchange rate is 1.10 USD per EUR. Import duty is 8% of the foreign currency price, and freight is 5% of the foreign currency price. What is the landed cost in USD?

  1. $2.89 million
  2. $2.75 million
  3. $3.11 million Correct answer.
  4. $3.25 million

Explanation

Convert the equipment price to USD and add duty and freight: €2.5 million × 1.10 × (1 + 0.08 + 0.05) = $3.1075 million, approximately $3.11 million.

Question 39Cost Estimating

A project has equipment cost $4.0M, bulk materials $1.6M, construction labor $3.2M, and construction indirects equal to 20% of construction labor. Engineering and owner's costs equal 15% of the subtotal of those four cost categories. What is the total installed cost?

  1. $10.20M
  2. $11.50M
  3. $9.44M
  4. $10.86M Correct answer.

Explanation

Construction indirects are 20% of $3.2M, or $0.64M. The subtotal is $4.0M + $1.6M + $3.2M + $0.64M = $9.44M; adding 15% for engineering and owner's costs gives $9.44M × 1.15 = $10.856M, approximately $10.86M.

Question 40Cost Estimating

A risk analysis gives a base estimate of $6.0M, a P50 estimate of $6.3M, and a P90 estimate of $7.5M. If the project budget is set at the P90 level, what contingency above the base estimate is included?

  1. $0.3M
  2. $7.5M
  3. $1.2M
  4. $1.5M Correct answer.

Explanation

Contingency above the base estimate is the P90 estimate minus the base estimate: $7.5M − $6.0M = $1.5M. The P50 value and the P90 total are not the contingency above the base.

Question 41Planning and Scheduling

In a work breakdown structure, which element represents the lowest level at which work is planned, monitored, and controlled?

  1. Planning package
  2. Cost account
  3. Work package Correct answer.
  4. Control account

Explanation

The work package is the lowest WBS level at which scope, duration, and cost can be reliably assigned and controlled. Planning packages sit above work packages and cover work not yet decomposed in detail.

Question 42Planning and Scheduling

Which path through a project network determines the shortest possible project duration?

  1. Critical path Correct answer.
  2. Resource-constrained path
  3. Path with the largest total float
  4. Baseline path

Explanation

The critical path is the longest-duration path through the network, so it sets the shortest achievable project duration. Activities on it have zero or minimum total float.

Question 43Planning and Scheduling

Total float for an activity is computed as:

  1. LF minus LS
  2. LS minus ES Correct answer.
  3. Free float plus duration
  4. EF minus ES

Explanation

Total float equals late start minus early start, and equivalently late finish minus early finish. It is the amount an activity can slip without delaying the project finish.

Question 44Planning and Scheduling

A milestone in a schedule is best characterized by:

  1. A task that carries a fixed budget
  2. A task with a duration equal to its lag
  3. A summary activity spanning an entire phase
  4. A zero-duration milestone event Correct answer.

Explanation

A milestone is a zero-duration event used to mark a significant point such as a approval, handover, or contractual date. It consumes no time or resources.

Question 45Planning and Scheduling

Which relationship means a successor cannot start until its predecessor finishes?

  1. Start-to-start
  2. Finish-to-start Correct answer.
  3. Finish-to-finish
  4. Start-to-finish

Explanation

In a finish-to-start relationship, the successor's start is driven by the predecessor's finish. This is the most common dependency in project networks.

Question 46Planning and Scheduling

The schedule baseline is:

  1. The most recent schedule update
  2. Approved performance comparison schedule Correct answer.
  3. The resource-loaded schedule
  4. The schedule produced before risk analysis

Explanation

The schedule baseline is the approved version of the schedule against which progress and performance are compared. Changes to it require formal change control.

Question 47Planning and Scheduling

A lag in a schedule relationship represents:

  1. The amount an activity can slip without affecting its successor
  2. The difference between early and late dates
  3. A waiting period inserted between two activities Correct answer.
  4. A mandatory overlap between two activities

Explanation

Lag is an intentional delay applied between activities, such as curing time after concrete placement. It is expressed in the same time units as the relationship.

Question 48Planning and Scheduling

A bar (Gantt) chart primarily displays:

  1. Resource histogram by trade
  2. Cumulative cost versus time
  3. The logical dependencies among activities only
  4. Activities plotted against a time scale Correct answer.

Explanation

A bar chart shows activities as bars positioned along a time scale, making duration and timing easy to read. Logic is often added with links, but the primary display is time-based activity bars.

Question 49Planning and Scheduling

Activity B has a finish-to-start relationship with Activity A with a lag of 3 days. Activity A has an early finish of day 10. What is the early start of Activity B?

  1. Day 13 Correct answer.
  2. Day 10
  3. Day 14
  4. Day 7

Explanation

For a finish-to-start link with lag, the successor early start equals predecessor early finish plus lag. Here, 10 + 3 = 13.

Question 50Planning and Scheduling

Activity C has two successors, D and E. Both links are finish-to-start with zero lag. D has a late start of day 20 and E has a late start of day 25. What is the late finish of Activity C?

  1. 5
  2. 25
  3. 20 Correct answer.
  4. 45

Explanation

In the backward pass, a predecessor's late finish is the minimum of its successors' late starts. The controlling value is therefore 20.