CBC CBC Financial Management & Estimating 1

Question 1

Which estimating method applies unit costs to each component of work based on material and labor quantities?

Accepted Answer

Unit price estimating

Answer

Unit price estimating calculates costs by multiplying measured quantities of each work item by a predetermined cost per unit.

Question 2

What does the term 'contingency' refer to in a construction budget?

Accepted Answer

Reserved funds for unforeseen costs

Answer

A contingency is a budgeted reserve set aside to cover unexpected or uncertain costs that may arise during construction.

Question 3

A contractor's overhead includes which of the following?

Accepted Answer

Office rent and administrative salaries

Answer

Overhead encompasses indirect business costs such as office rent, utilities, and administrative salaries that are not tied to a single project.

Question 4

What is a Schedule of Values (SOV) used for on a construction project?

Accepted Answer

Breaking the contract sum into line items for progress billing

Answer

A Schedule of Values allocates the total contract amount across work items so that progress payments can be calculated based on percentage of completion.

Question 5

Which type of bond guarantees that a contractor will complete a project according to the contract terms?

Accepted Answer

Performance bond

Answer

A performance bond protects the owner by ensuring the contractor will fulfill all contractual obligations or the surety will complete the project.

(CBC) Certified Building Contractor Practice Test

(CBC) Certified Building Contractor Practice Test

CBC CBC Financial Management & Estimating 1