*AIC Test 12% Management Concepts

What graphical measurement tool is a bar graph displaying a frequency distribution?

Histogram

What are the quality standards used internationally called?

ISO 9000

Which management system was developed based on Toyota's Production System? A. TQM B. Six Sigma C. Lean D. ISO 9000

C. Lean

In which delivery method is the construction administrator most like a consultant? A. lump sum B. CM agency C. CM at risk D. integrated project delivery

B. CM agency

Which chart would be the most appropriate to show the percentage of fall protection safety violations compared to all safety violations? A. histogram B. bar chart C. pie chart D. line chart

C. pie chart

What management philosophy is defined as a performance and processed-oriented approach to safety and health that is improved continually and applies proven principles to maximize an organization's long-term competitiveness?

Total Safety Management

A contract has been entered into whereby the Contractor agrees to design, build, purchase the land and finance the project. What is this type of contract called?

Turn Key

A clause in the contract states that "if the Quantities of an item of work varies from the estimated quantities by more than 20 percent, then the price will be adjusted." Which type of contract will this clause be primarily used in?

Unit Price

A contract is entered into whereby the Design, Scope and Bid quantities are established and payment for the work is to be made upon the basis of the actual quantity placed. What is this type of contract called?

Unit Price

What is the name of the clause that is sometimes used if the contract has the potential of an uncertainty in either labor or material prices?

Escalation

What are the two fee methods that an Agency CM firm may offer an Owner?

Fixed Price or Guaranteed Maximum Price

What graphical measurement tool is a pictorial representation of a process?

Flow Chart

Which of the following contract formation principles are needed to form a valid contract? A. Offer, Acceptance, Meeting of the Minds and Consideration B. Performance, Technical Specifications and Consideration C. General Conditions, Supplementary Conditions and a Proposal D. Plans, Technical Specifications, General and Supplementary Conditions

A. Offer, Acceptance, Meeting of the Minds and Consideration

A company has $10,000 in cash, $20,000 in equipment, and $20,000 in accounts payable. The tax rate is 13%. What is the current ratio? A. 0.5 B. 0.67 C. 1.3 D. 1.5

a. $10,000/$20,000= .5

Which delivery method has the most risk for the contractor? A. design-bid-build B. design-build C. CM at risk D. integrated project delivery

B. design-build

Which of the following should a construction professional provide when delivering services to his or her clients based on the AIC code of ethics? A. adjustable ethics based on clients' preferences B. management excellence C. minimum industry standards D. complete transparency to everyone on every task

B. management excellence

Which of the following contract types is best used if the scope is well defined but not the quantities of material? A. lump sum B. unit price C. cost plus D. cost plus with GMP

B. unit price

What is the return on assets assuming a net profit before tax of $15,000 and $30,000 total assets? A. 0.5% B. 2% C. 50% D. 200%

C. $15,000/$30,000 x 100= 50%

Which legal entity makes it extremely difficult to generate new capital to expand the business?

Sole Propietorship

Which law are corporations formed under?

State

Which legal entity is considered perpetual?

Corporation

A company has $50,000 in equipment, $20,000 in cash, and $30,000 in accounts payable. How much working capital does it have? A. ($10,000) B. $10,000 C. $20,000 D. $40,000

A. $20,000-$30,000= ($10,000)

Which is an advantage of forming a corporation? A. Shareholders have reduced personal liability. B. The corporation's value can't go down from its initial purchase price. C. Less taxes are paid than in a limited liability corporation. D. Quick decision making is possible, especially for large companies.

A. Shareholders have reduced personal liability.

Which of the following contract types is generally considered to have the most risk for the contractor? A. lump sum B. unit price C. cost plus D. cost plus with GMP

A. lump sum

Under which legal structure are the least total taxes paid for the goods and services provided by the company? A. sole proprietorship B. federalist C. corporation D. joint venture

A. sole proprietorship

Which statement is true about the design-build delivery method from the owner's perspective? A. Design is complete when contractor is hired. B. Fast tracking is difficult with this delivery method. C. There is a single source of fault for building system failures. D. Design Build firms are rarely temporary joint ventures.

C. There is a single source of fault for building system failures.

A contract is entered into whereby the Design and Scope are partially undefined, the Owner holds a contract with the A/E, the Owner holds the contracts with each trade and the Owner also holds a contract with a management service company to perform the trade coordination, cost control and scheduling services. What is this type of contract called?

Construction Management

Which legal entity affords an individual the most protection of individual assets from creditors of the business?

Corporation

Which legal entity is taxed twice?

Corporation

Which type of legal entity requires a charter?

Corporation

A contract is entered into whereby the design and scope are undefined and the Owner agrees to pay for all Direct Labor, Materials, Equipment plus some agreed upon allowance to the Contractor for their services. What is this type of contract called?

Cost Plus

Which of the following is a management system used to improve customer satisfaction? A. TQM B. Six Sigma C. Lean D. All the above

D. All the above

Which type of legal entity allows the income and deductions of the corporation to flow through to the individual tax returns of the shareholders and it avoids federal taxes? A. Partnership B. Corporation C. Sole Proprietorship D. Subchapter S Corporation

D. Subchapter S Corporation

Which of the following is a major difference between a CM agency and a CM at risk? A. manages construction on the owner's behalf B. has a contract with the designer C. provides a lump sum price for construction services D. caps the construction costs the owner is required to pay

D. caps the construction costs the owner is required to pay

In the construction industry, which legal entity is often a temporary arrangement? A. sole proprietorship B. partnership C. limited liability corporation D. joint venture

D. joint venture

Which of the following is a fundamental element of a contract? A. exchange of money B. revised scope of work C. time extension D. mutual acceptance

D. mutual acceptance

The Owner wants to Fast-Track a construction project, Which type of contract best supports this process?

Design-Build

A contract is entered into whereby two Contractors agree to combine their resources to bid and build a specific project. What is this type of contract called?

Joint Venture

Which document establishes the reference date from which the beginning of the project is calculated and that the contractor can occupy the site?

Notice to Proceed

Which legal entity exposes the personal assets of a person to pay for actions of other people involved in the business?

Partnership

The owner requests that you submit a proposal supplement titled, "Statement of Contractors' Qualifications - All Contracts" and under the officers/principals section it requests the names and titles of the vice president and the president. A proposal is submitted to the Owner with a bid bond, signed addenda, and the proposal form is attached and signed by the chief estimator. Have all of the contract formation principles been satisfied and your proposal would be considered responsive?

The principle of Legal Capacity has not been met, therefore, a non-responsive bid.

What management philosophy tries to maximize the competitiveness of an organization through continuous improvement?

Total Quality Management