AACE International Exam CCP Topic 3 Question 2 Discussion

Actual exam question for AACE International's CCP exam

Question #: 2
Topic #: 3

You have recently been appointed as the Cost Engineer to oversee process improvement projects for a Discrete Part Manufacturer. You have been asked to calculate the CPI on a project initiated to implement a Value Stream Mapping Initiative. The accountant is only able to provide you with BAC and EAC figures of $ 5000 and 57500 respectively. The CPI is:

unable to be calculated from the information given

A<1

B=1

C=1

D>1

Show Suggested Answer

Suggested Answer: A

The Cost Performance Index (CPI) is calculated using the formula:

CPI = BAC / EAC

Given:

Budget at Completion (BAC) = $50,000

Estimate at Completion (EAC) = $57,500

CPI = $50,000 / $57,500 = 0.8696

Since CPI < 1, it indicates that the project is over budget. The correct answer is A. <1.

by Ryan at Aug 26, 2024, 10:41 PM

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Stephen

3 months ago

I see your point, Tony. So, the answer would be D) >1 then.

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Tony

3 months ago

But isn't the CPI always calculated as EV/AC? So, in this case, it would be greater than 1.

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Theodora

3 months ago

Ha, the accountant really dropped the ball here! Without the actual costs, there's no way to calculate the CPI. A is the way to go.

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Reed

2 months ago

Ha, the accountant really dropped the ball here! Without the actual costs, there's no way to calculate the CPI. A is the way to go.

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Isabella

3 months ago

A) <1

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Aimee

3 months ago

Looks like we need the actual costs and planned costs to figure out the CPI. Going with A on this one.

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3 months ago

Hmm, without the actual cost and schedule figures, there's no way to calculate the CPI. This is tricky, but I guess the correct answer is A.

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Coleen

3 months ago

It's definitely a tricky situation, but I believe the accountant needs to provide more details for us to accurately calculate the CPI.

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Suzi

3 months ago

Yes, I think the correct answer is A because we can't determine if it's less than or greater than 1 without the actual cost and schedule data.

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Viola

3 months ago

I agree, without the necessary information, it's impossible to calculate the CPI.

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