BCM Construction Cost Estimating and Control 1 — Questions and Answers
Question 1: A conceptual (order-of-magnitude) estimate in construction typically has an accuracy range of:
- -30% to +50% (Correct answer)
- -5% to +10%
- -15% to +15%
- -10% to +25%
Correct answer: -30% to +50%
Order-of-magnitude estimates produced early in design have a wide accuracy range due to limited project definition at that stage.
Question 2: Direct costs in construction estimating include:
- Labor, materials, and equipment used directly in the construction work (Correct answer)
- Home office overhead and profit
- Permit fees and insurance premiums
- Project management salaries and site office costs
Correct answer: Labor, materials, and equipment used directly in the construction work
Direct costs are expenses directly tied to physical construction activities, including field labor, materials incorporated into the work, and equipment used on-site.
Question 3: The quantity takeoff process in construction estimating involves:
- Measuring and calculating the quantities of materials and work from project drawings (Correct answer)
- Soliciting subcontractor bids for specialty trades
- Reviewing historical cost data from similar projects
- Calculating overhead and profit markup on direct costs
Correct answer: Measuring and calculating the quantities of materials and work from project drawings
Quantity takeoff is the systematic measurement of all materials and work items from construction documents to form the basis of a cost estimate.
Question 4: General overhead (general and administrative costs) in construction estimating refers to:
- Costs of running the contractor's main office not attributable to a specific project (Correct answer)
- On-site supervision and temporary facilities costs
- Subcontractor markup on their own scope
- Equipment depreciation charged to a project
Correct answer: Costs of running the contractor's main office not attributable to a specific project
General overhead covers home office costs like executive salaries, rent, and accounting that support all projects but aren't charged to a specific job.
Question 5: Value engineering in construction is best defined as:
- A systematic process to achieve required functions at the lowest life-cycle cost without reducing quality (Correct answer)
- Reducing project scope to cut costs below the original budget
- Substituting cheaper materials regardless of performance
- Fast-tracking the design phase to save time
Correct answer: A systematic process to achieve required functions at the lowest life-cycle cost without reducing quality
Value engineering analyzes the functions of systems and components to find cost-effective alternatives that meet performance requirements.
Question 6: A cost-plus-fee contract places the primary financial risk of cost overruns on the:
- Owner (Correct answer)
- General contractor
- Surety company
- Subcontractors
Correct answer: Owner
In a cost-plus contract, the owner pays all actual project costs plus a fee, bearing the risk if costs exceed initial estimates.
BCM Construction Cost Estimating and Control 1
A conceptual (order-of-magnitude) estimate in construction typically has an accuracy range of: