CCC Cost Estimating & Budgeting Flashcards

Which estimating technique best suits a project where scope is well-defined and detailed material take-offs are available?

Answer: Bottom-up estimating

Bottom-up estimating builds the total cost from detailed work package estimates, making it the most accurate method when scope is fully defined.

What is escalation in the context of cost estimating?

Answer: The adjustment of costs to account for anticipated price changes over time

Escalation adjusts estimated costs to reflect anticipated inflation or market price changes between the estimate date and when costs will actually be incurred.

In the AACE Recommended Practice, what does 'expected accuracy range' describe?

Answer: The range within which the final cost is expected to fall relative to the estimate

Expected accuracy range expresses the statistical confidence interval around an estimate, indicating how much the final cost may deviate from the estimated value.

Which cost is NOT typically included in a project's direct costs?

Answer: Home office overhead

Home office overhead is an indirect cost applied as a burden rate, not a direct cost attributable to specific project work.

What is the purpose of a 'should-cost' estimate prepared by an owner's cost consultant?

Answer: To provide an independent benchmark for evaluating bids or proposals

A should-cost estimate is an owner's independent assessment of what a project ought to cost, used to evaluate contractor bids for reasonableness.

Which factor most directly increases the accuracy of a parametric cost model?

Answer: A robust and relevant historical cost database

Parametric models derive their reliability from the quality and relevance of the historical data used to develop the cost-per-unit relationships.