BCM Construction Cost Estimating and Control 3

Question 1

Job cost accounting in construction differs from standard accounting because it tracks costs:

Accepted Answer

By individual project and work activity rather than by time period alone

Answer

Only for tax reporting purposes at year end

Answer

Exclusively by material categories across all projects

Answer

Based on cash payments rather than accrual accounting

Question 2

The purpose of a bid bond in the construction bidding process is to:

Accepted Answer

Guarantee that the low bidder will enter into the contract and provide required bonds

Answer

Ensure subcontractors submit accurate bids to the GC

Answer

Cover the owner's costs if the project is cancelled after bid opening

Answer

Provide warranty coverage for the completed structure

Question 3

Life-cycle cost analysis in construction evaluates:

Accepted Answer

Total cost of ownership including initial construction, operation, maintenance, and eventual replacement

Answer

Only the upfront construction cost of a building system

Answer

The contractor's profit margin over the life of the project

Answer

Annual depreciation of construction equipment

Question 4

Preliminary budget estimates prepared during the schematic design phase are typically based on:

Accepted Answer

Gross area multiplied by historical cost-per-square-foot benchmarks for similar project types

Answer

Detailed quantity takeoffs from completed construction drawings

Answer

Subcontractor pricing for all major trade packages

Answer

Final material specifications and equipment selections

Question 5

Which pricing strategy in construction bidding involves adding a fixed percentage markup to all direct costs?

Accepted Answer

Cost-plus-percentage markup

Answer

Lump sum fixed-price bidding

Answer

Unit price bidding

Answer

Target value delivery

Question 6

In construction purchasing, the phrase 'buy-out' refers to:

Accepted Answer

Awarding subcontracts and material purchases after the main contract is signed

Answer

The owner purchasing the property before construction begins

Answer

A contractor acquiring a competitor's business

Answer

Purchasing insurance coverage for the project