AACE CST 2024 COMPREHENSIVE QUESTIONS AND
VERIFIED ANSWERS STUDY GUIDE/GET IT RIGHT
GRADE A+
Operating Costs
Expenses incurred during the normal operation of a facility including labor, materials,
utilities, and other related costs. Examples: fuel, lubricants, scheduled part changes,
building maintenance, cleaning services, taxes
Manufacturing Costs
Variable & fixed, direct & indirect costs chargeable to the production of a given product,
usually expressed in cents or dollars per unit of production, or dollars per year
_______ Is the value of an activity or asset. Generally, this value is determined by
the cost of the resources that are expended to complete the activity or produce
the asset. An example would be the facilities needed to produce an activity or
asset, which would include the tooling, electricity, taxes, and maintenance, etc.,
necessary to keep the facility available for use. Other costs might be office
supplies, communication costs, travel costs, and security costs
Cost
Any consumable, except time, required to accomplish an activity are considered
_______. From a total cost and asset management perspective, _______ may
include any real or potential investment in strategic assets including time,
monetary, human, and physical.
Resources, Resources
A resource becomes a cost when it is ______ or consumed in an _____or project
invested, project
Maintenance Costs
Labor, material, & other related costs incurred in conducting corrective and preventative
maintenance and repair on a facility
Fixed Capital
Includes plant equipment, building, furniture and fixtures,and transportation equipment
used directly in the production of a product or service
Depreciation
Form of capital recovery for property with a life span of more than 1 year; a portion of
the asset's value is periodically charged to current operations. Decreases book value on
the balance sheet, added depreciation expense to income statement. Managerial rather
than cost accounting concern.
Amortization
form of capital recovery for property with indefinite life; distribution of the initial cost by
periodic charges to operations as in depreciation
Accrual
Accounting method that records revenues and expenses when they are incurred,
regardless of when cash is exchanged
,Expense
Expenditures of short-term value, including depreciation, as opposed to land and other
fixed capital
Fixed Cost
Costs that must be provided independent of short term variations volume of work
activity. These can be either direct or indirect costs
Variable Cost
costs that are a function of production, e.g., raw materials
costs, by-product credits, and those processing costs that vary with plant output (such
as raw materials, utilities, catalysts and chemical, packaging, and labor for batch
operations)
Unit Cost
= [(fixed costs) + (qty * variable cost)] / (qty)
The sum of the practices and processes that an enterprise uses to manage the
total life cycle cost investment in its portfolio of strategic assets is called
_________
Total Cost Management
______ is the application of scientific principles and techniques to problems of :
- estimation
- cost control
- business planning & management science
- profitability analysis
- project management
- planning & scheduling
Cost Engineering
Material, labor, and "other" are categories of _________.
Resources
The product lifecycle is the complete history of a product through its ______,
definition, production, operation, and obsolescence /______ phases.
concept, disposal
The distinction between product life cycle and project life cycle is that the latter
does not include the ______ and ______.
operation, disposal
___________ is the systematic numeric method of classifying various categories
of costs for accounting purposes
Code of Accounts
______ is used used in situations where each job is different and is performed to
the customer's specifications. ______ involves keeping an account of direct costs
(labor, machine time, raw materials) and indirect costs (overheads)
Job Costing, Job Costing
A process is a sequence or independent & linked procedures which ___________
to convert inputs into outputs. These outputs then serve as inputs for the next
stage until a known goal or end result is reached
consume resources
A _____ is a good, idea, method, information, object, service, etc, that is the end
result of a process & serves as a need or want satisfierProduct
, Product
Product manufactured along with a different product, in a process in which both
are required in the production of another product are considered _____
Co-products
A key feature of a ____ is that it has low value in comparison with the principal
product(s) & may be discarded or sold
by-product
Types of Manufacturing Operations include _____, ______ run and _____ shop
Process, Batch, Job
This manufacturing operation runs almost continuously making the same thing.
Examples are refining and chemical plants, and very long run assembly
operations.
Process
A ______ characterized by setting up for one product, producing a set quantity of
product, and then shutting down to change over to producing another product.
Batch Run
A _______ Similar to a batch run operation, except that you only produce 1 of the
item. Each job results in a customized product. Examples are metal fabrication,
prototype, fabrication.
job shop
Roles such as executive/senior management, legal, HR, business development,
etc. These roles are the farthest removed from the actual production of discrete
product at the various facilities. They are shared across many production
locations and considered ______.
overhead
______ are field/plant support personnel, located at the site. These resources
help the operation run smoothly. These are people like local payroll, facility
maintenance, site project controls, site senior (office-based) supervisors and
management who are shared across the various products the particular location
produces.
Indirects
_______are the remote location people directly involved in producing the product.
These are the easiest to correlate their effort to a particular product. First line
supervisors are also normally considered ______.
Directs
The owner approaches cost from a _____ point of view. Owners not only consider
the cost of the construction, or process, but ______ supervision
and overhead, implementation costs, cost of money, furniture, fixtures,
equipment( FFE) and other considerations
holistic, internal
Contractors, subcontractors, suppliers only consider their part of the _______
and are responsible for that alone.
Project costs
Appraising or estimating the worth of something having economic or monetary
value is the general description of ________.
valuation
VERIFIED ANSWERS STUDY GUIDE/GET IT RIGHT
GRADE A+
Operating Costs
Expenses incurred during the normal operation of a facility including labor, materials,
utilities, and other related costs. Examples: fuel, lubricants, scheduled part changes,
building maintenance, cleaning services, taxes
Manufacturing Costs
Variable & fixed, direct & indirect costs chargeable to the production of a given product,
usually expressed in cents or dollars per unit of production, or dollars per year
_______ Is the value of an activity or asset. Generally, this value is determined by
the cost of the resources that are expended to complete the activity or produce
the asset. An example would be the facilities needed to produce an activity or
asset, which would include the tooling, electricity, taxes, and maintenance, etc.,
necessary to keep the facility available for use. Other costs might be office
supplies, communication costs, travel costs, and security costs
Cost
Any consumable, except time, required to accomplish an activity are considered
_______. From a total cost and asset management perspective, _______ may
include any real or potential investment in strategic assets including time,
monetary, human, and physical.
Resources, Resources
A resource becomes a cost when it is ______ or consumed in an _____or project
invested, project
Maintenance Costs
Labor, material, & other related costs incurred in conducting corrective and preventative
maintenance and repair on a facility
Fixed Capital
Includes plant equipment, building, furniture and fixtures,and transportation equipment
used directly in the production of a product or service
Depreciation
Form of capital recovery for property with a life span of more than 1 year; a portion of
the asset's value is periodically charged to current operations. Decreases book value on
the balance sheet, added depreciation expense to income statement. Managerial rather
than cost accounting concern.
Amortization
form of capital recovery for property with indefinite life; distribution of the initial cost by
periodic charges to operations as in depreciation
Accrual
Accounting method that records revenues and expenses when they are incurred,
regardless of when cash is exchanged
,Expense
Expenditures of short-term value, including depreciation, as opposed to land and other
fixed capital
Fixed Cost
Costs that must be provided independent of short term variations volume of work
activity. These can be either direct or indirect costs
Variable Cost
costs that are a function of production, e.g., raw materials
costs, by-product credits, and those processing costs that vary with plant output (such
as raw materials, utilities, catalysts and chemical, packaging, and labor for batch
operations)
Unit Cost
= [(fixed costs) + (qty * variable cost)] / (qty)
The sum of the practices and processes that an enterprise uses to manage the
total life cycle cost investment in its portfolio of strategic assets is called
_________
Total Cost Management
______ is the application of scientific principles and techniques to problems of :
- estimation
- cost control
- business planning & management science
- profitability analysis
- project management
- planning & scheduling
Cost Engineering
Material, labor, and "other" are categories of _________.
Resources
The product lifecycle is the complete history of a product through its ______,
definition, production, operation, and obsolescence /______ phases.
concept, disposal
The distinction between product life cycle and project life cycle is that the latter
does not include the ______ and ______.
operation, disposal
___________ is the systematic numeric method of classifying various categories
of costs for accounting purposes
Code of Accounts
______ is used used in situations where each job is different and is performed to
the customer's specifications. ______ involves keeping an account of direct costs
(labor, machine time, raw materials) and indirect costs (overheads)
Job Costing, Job Costing
A process is a sequence or independent & linked procedures which ___________
to convert inputs into outputs. These outputs then serve as inputs for the next
stage until a known goal or end result is reached
consume resources
A _____ is a good, idea, method, information, object, service, etc, that is the end
result of a process & serves as a need or want satisfierProduct
, Product
Product manufactured along with a different product, in a process in which both
are required in the production of another product are considered _____
Co-products
A key feature of a ____ is that it has low value in comparison with the principal
product(s) & may be discarded or sold
by-product
Types of Manufacturing Operations include _____, ______ run and _____ shop
Process, Batch, Job
This manufacturing operation runs almost continuously making the same thing.
Examples are refining and chemical plants, and very long run assembly
operations.
Process
A ______ characterized by setting up for one product, producing a set quantity of
product, and then shutting down to change over to producing another product.
Batch Run
A _______ Similar to a batch run operation, except that you only produce 1 of the
item. Each job results in a customized product. Examples are metal fabrication,
prototype, fabrication.
job shop
Roles such as executive/senior management, legal, HR, business development,
etc. These roles are the farthest removed from the actual production of discrete
product at the various facilities. They are shared across many production
locations and considered ______.
overhead
______ are field/plant support personnel, located at the site. These resources
help the operation run smoothly. These are people like local payroll, facility
maintenance, site project controls, site senior (office-based) supervisors and
management who are shared across the various products the particular location
produces.
Indirects
_______are the remote location people directly involved in producing the product.
These are the easiest to correlate their effort to a particular product. First line
supervisors are also normally considered ______.
Directs
The owner approaches cost from a _____ point of view. Owners not only consider
the cost of the construction, or process, but ______ supervision
and overhead, implementation costs, cost of money, furniture, fixtures,
equipment( FFE) and other considerations
holistic, internal
Contractors, subcontractors, suppliers only consider their part of the _______
and are responsible for that alone.
Project costs
Appraising or estimating the worth of something having economic or monetary
value is the general description of ________.
valuation
