Cost and Time Management Flashcards

Which type of cost is directly attributable to a specific construction project and varies with the volume of work?

Answer: Direct cost

Direct costs are expenses that can be traced directly to a project, such as labor, materials, and equipment used on site.

A construction manager identifies a critical path activity with 10 days of free float. What does this mean?

Answer: The activity can be delayed 10 days without delaying any successor activity's early start

Free float is the amount of time an activity can be delayed without affecting the early start of any immediate successor.

Which contract type places the greatest financial risk on the owner?

Answer: Cost-plus-fixed-fee contract

Cost-plus contracts reimburse all allowable costs plus a fee, giving the owner maximum cost risk since there is no price ceiling without a GMP clause.

What is the formula for calculating the Variance at Completion (VAC)?

Answer: BAC - EAC

VAC = BAC - EAC, representing the expected budget surplus or deficit at project completion.

A construction schedule shows lag on a Finish-to-Start relationship. What does this represent?

Answer: A required waiting period between the predecessor finishing and successor starting

Lag in a Finish-to-Start relationship means the successor cannot start until a specified time after the predecessor finishes.

Which method of schedule compression reduces project duration by adding resources to critical path activities?

Answer: Crashing

Crashing adds resources (overtime, additional crews) to critical path activities to reduce their duration, typically increasing cost.

In construction cost management, what is a contingency reserve used for?

Answer: Known unknowns — identified risks that may or may not occur

Contingency reserves address known unknowns — identified risks included in the project's risk register that may require additional funds.