Which of the following percent complete measurement techniques is best suited for long-term non-production accounts (such as overhead accounts)?

A major theme park is expanding the existing facility over a five-year period. The design phase will be completed one year after the contract is awarded. Major engineering drawings will be finalized two years after the design contract is awarded and construction will begin three years after the award of the design contract. New, unique ride technology will be used and an estimate will need to be developed to identify these costs that have no historical data.

Which of the following percent complete measurement techniques is best suited for long-term non-production accounts (such as overhead accounts)?
A . Ratio/level of effort
B . Start/finish
C . Units completed
D . Incremental milestone

View Answer

Answer: A

Explanation:

For long-term, non-production accounts (such as overhead accounts), the Ratio/level of effort measurement technique is best suited. This technique is used to measure work that doesn’t directly produce deliverables but contributes indirectly to project progress, such as administrative tasks, support activities, and management efforts. The level of effort is typically spread evenly over a time period and is often calculated based on the passage of time rather than specific work units or milestones.