BCM Construction Cost Estimating and Control 2 — Questions and Answers
Question 1: The purpose of a construction contingency budget is to:
- Cover unforeseen costs and scope uncertainties during project execution (Correct answer)
- Fund change orders requested by the owner
- Pay for design errors and omissions
- Compensate subcontractors for bid errors
Correct answer: Cover unforeseen costs and scope uncertainties during project execution
Construction contingency is a reserved amount to address unknown risks and uncertainties without requiring formal contract changes.
Question 2: A Schedule of Values (SOV) in construction is used primarily to:
- Break down the contract sum by work items to support monthly payment applications (Correct answer)
- Track labor productivity on the job site
- Document subcontractor change orders
- Allocate project costs across accounting cost codes
Correct answer: Break down the contract sum by work items to support monthly payment applications
The SOV allocates the total contract price across individual work items, enabling fair monthly progress billing based on percentage complete.
Question 3: Which cost estimating method applies historical cost-per-square-foot data from similar completed projects?
- Parametric estimating (Correct answer)
- Detailed unit price estimating
- Assembly estimating
- Bottom-up estimating
Correct answer: Parametric estimating
Parametric estimating uses statistical relationships between historical data and project parameters (like square footage) to quickly estimate costs.
Question 4: Cost variance (CV) in Earned Value Management is calculated as:
- Earned Value minus Actual Cost (Correct answer)
- Planned Value minus Actual Cost
- Budgeted Cost minus Earned Value
- Actual Cost minus Planned Value
Correct answer: Earned Value minus Actual Cost
CV = EV - AC; a positive value means the project is under budget, while a negative value indicates a cost overrun.
Question 5: In construction cost control, a 'cost code' system is used to:
- Organize and track actual expenditures by work category for comparison to the estimate (Correct answer)
- Assign unique numbers to construction drawings
- Code subcontractor invoices for tax purposes
- Encrypt confidential bid documents
Correct answer: Organize and track actual expenditures by work category for comparison to the estimate
Cost codes categorize job costs by work type, enabling real-time comparison of actual versus budgeted costs for each scope item.
Question 6: The Estimate at Completion (EAC) in EVM, assuming future performance matches current CPI, is calculated as:
- Budget at Completion ÷ CPI (Correct answer)
- Actual Cost + Remaining Budget
- Earned Value + Planned Value
- Budget at Completion × SPI
Correct answer: Budget at Completion ÷ CPI
EAC = BAC/CPI projects the final cost if the current cost efficiency rate continues for the remainder of the project.
BCM Construction Cost Estimating and Control 2
The purpose of a construction contingency budget is to: