Authentic AACE International Certification Exam CCP Questions Answers

To calculate the increase in copper prices over 30 months (which is 2.5 years), we apply the inflation rates for the first two years and half of the third year:

Year 1: 1.0%

Year 2: 1.5%

Year 3 (half-year): 1.5% / 2 = 0.75%

The total percentage increase is calculated as:

Total Increase=(1+0.01)×(1+0.015)×(1+0.0075)−1\text{Total Increase} = (1 + 0.01) \times (1 + 0.015) \times (1 + 0.0075) - 1Total Increase=(1+0.01)×(1+0.015)×(1+0.0075)−1 \text{Total Increase} = 1.01 \times 1.015 \times 1.0075 - 1 \approx 1.066 - 1 = 0.066 \text{ or 6.6%}

So, the correct answer isC. 6.6%.

To calculate the break-even point, we need to determine how many units must be sold to cover all fixed and variable costs. The formula to calculate the break-even point in units is:

Break-even units=Total Fixed CostsSelling Price per Unit−Variable Cost per Unit\text{Break-even units} = \frac{\text{Total Fixed Costs}}{\text{Selling Price per Unit} - \text{Variable Cost per Unit}}Break-even units=Selling Price per Unit−Variable Cost per UnitTotal Fixed Costs​

Given:

Selling Price per Unit = $0.55

Variable Cost per Unit = $0.45 + $0.02 = $0.47

Contribution Margin per Unit = $0.55 - $0.47 = $0.08

Total Fixed Costs:

Total Fixed Costs=1500+4000+500=6000\text{Total Fixed Costs} = 1500 + 4000 + 500 = 6000Total Fixed Costs=1500+4000+500=6000

Break-even units:

Break-even units=60000.08=75,000 units\text{Break-even units} = \frac{6000}{0.08} = 75,000 \text{ units}Break-even units=0.086000​=75,000 units

Therefore, the correct answer isC. 75,000 units.

In aLump-Sum/Fixed-Price contract, the contractor agrees to complete the work for a set price, regardless of the actual costs incurred. This type of contract is often used when the project scope is well-defined, and the contractor has the freedom to choose methods and resources to complete the work within the agreed price.

Key Points:

Lump-Sum/Fixed-Price Contract:

The contractor has full responsibility for carrying out the project within the agreed-upon price.

The contractor is incentivized to control costs and manage resources efficiently because any cost overruns will reduce their profit margin.

Other Contract Types:

Guaranteed Maximum Price (GMP):The contractor is reimbursed for costs up to a maximum limit. Any costs above this limit are the contractor's responsibility.

Cost Reimbursable/Fixed Fee:The contractor is reimbursed for actual costs incurred, plus an additional fee, which might be a fixed amount or a percentage of the costs.

Measured Unit Price:Payment is made based on the actual quantity of work completed, with predefined rates for each unit.

Conclusion:The correct answer isD. Lump-sum/Fixed priceas this contract type gives the contractor the freedom to choose their methods and resources to complete the project, with a focus on efficiency to maximize profit within the fixed price.