4.6 Cost Estimating Budgets and Appropriations

Question 1

Commitment

Answer 1

The administrative reservation of funds, usually by the local comptroller, in anticipation of a future obligation

A commitment is the response to a request for a spending action

Ensures that the funds are available in the:
- Amount requested
- Correct FY
- Proper appropriation

Question 2

Obligation

Answer 2

The legal reservation of funds to make a future payment of money

incurred as soon as an order is placed or a contract is awarded for the delivery of goods and performance of service

Question 3

Expenditure

Answer 3

A charge against available funds. It results from a voucher, claim, or other document approved by competent authority.

The issuance of a Government check.

Question 4

Outlay

Answer 4

Occurs when the vendor cashes the expenditure check and money flows from the Treasury to the vendor or supplier

Question 5

Flyaway Cost

Answer 5

Procurement of Prime Mission Equipment

Question 6

Weapon System Cost

Answer 6

Prime Mission Equipment (PROC)

AND

Support Items (PROC)

Question 7

Procurement Costs

Answer 7

Weapon System Costs (Prime mission equipment and Support items)

AND

initial spares (PROC)

Question 8

Program Acquisition Cost

Answer 8

Procurement Costs (Weapon System + Initial Spares)

AND

Development Costs (RDT&E)

AND

Facilities MILCON

Question 9

Operating and Support Costs

Answer 9

Sustainment (O&M & MILPERS)

AND

Disposal (O&M)

Question 10

Life Cycle Costs

Answer 10

Program Acqusition Costs (RDT&E, Facilities, Procurment Costs)

AND

Operating and Support Costs

Question 11

Five subcomponents of LCC Composition