CDFM Module 2: Budget and Cost Analysis

CDFM Module 2: Budget and Cost Analysis practice questions, page 2 of 4, with answer review and explanations.

Question 6

According to the Cost as an Independent Variable (CAIV) costing principle, if the cost estimate for a major weapon system rises during the system demonstration period of development, what is DoD expected to do?

  1. Add funding in the next Program Objective Memorandum (POM) submission to obtain a decision from OSD in the Program/Budget process.
  2. Add funding to the overall cost of the program since the system is needed.
  3. Submit the change to Congress in the next budget for decision by the Congressional Committees.
  4. Hold funding level by reducing the number of units or the performance characteristics of the system.

Question 7

Which term means dividing a lump-sum appropriation into parts that are designated for specific organizations?

  1. Sub-Appropriation
  2. Reprogram
  3. Authorization
  4. Allocation

Question 8

If a major weapon system development program is intended to span three years, the first year budget should:

  1. fund two years of effort.
  2. fund only the work to be performed in the first year.
  3. fully fund total development.
  4. fund one-third of total development.

Question 9

Which of the following is not a DoD Component Enterprise Resource Planning (ERP) System?

  1. Financial Improvement and Audit Readiness (FIAR)
  2. Defense Enterprise Accounting and Management System (DEAMS)
  3. Logistics Modernization Program (LMP)
  4. General Fund Enterprise Business System (GFEBS)

Question 10

What is an indirect cost?

  1. Cost not directly identified with a single final cost objective and often referred to as overhead costs
  2. Cost that can be directly tracked or identified in the cost data for a specific work or material function with a particular definable acquisition item or program
  3. Cost incurred in the past that will not be affected by any present or future decision
  4. Cost for items and services that are expended one time or otherwise shortened time-period transaction that is not repeated at regular intervals