CDS Cost Estimation & Budgeting 3 — Questions and Answers
Question 1: What is the purpose of a 'unit price' estimate in demolition contracting?
- To set a fixed lump sum for the entire project
- To price individual work items per measurable unit, allowing cost adjustment as quantities change (Correct answer)
- To estimate only the overhead and profit
- To calculate the total weight of debris
Correct answer: To price individual work items per measurable unit, allowing cost adjustment as quantities change
Unit price estimating assigns a cost per unit (e.g., per linear foot, per ton) so that the final contract value can flex with actual quantities encountered.
Question 2: A demolition supervisor notices that actual concrete removal is taking 30% longer than estimated. The BEST immediate action is to:
- Continue at the same pace and hope to make up time later
- Analyze the cause, document the variance, and notify the project manager to assess budget impact (Correct answer)
- Reduce the crew size to cut costs
- Ignore it since contingency will cover the overrun
Correct answer: Analyze the cause, document the variance, and notify the project manager to assess budget impact
Early identification and documentation of production variances allows management to make informed decisions and potentially adjust the budget or schedule.
Question 3: Which document is most useful for tracking actual expenditures against a demolition project budget in real time?
- The original bid document
- A cost-to-complete report or job cost ledger (Correct answer)
- The OSHA 300 log
- The pre-demolition survey
Correct answer: A cost-to-complete report or job cost ledger
A job cost ledger or cost-to-complete report compares budgeted amounts to actual costs incurred, enabling active budget management.
Question 4: Salvage value credits in a demolition estimate are best described as:
- Additional charges for removing high-value materials
- Revenue offsets from selling recyclable materials like structural steel or copper (Correct answer)
- Penalties for damaging salvageable items
- Costs associated with storing salvaged materials on site
Correct answer: Revenue offsets from selling recyclable materials like structural steel or copper
Salvage credits reduce the net project cost by crediting revenue from selling recyclable materials such as structural steel, copper wiring, or aluminum.
Question 5: A lump-sum demolition contract places the risk of quantity overruns primarily on:
- The owner
- The contractor (Correct answer)
- The local municipality
- The insurance carrier
Correct answer: The contractor
In a lump-sum contract, the contractor assumes the risk that actual quantities or conditions may differ from what was estimated.
Question 6: Which of the following is an example of an indirect cost in a demolition project?
- Excavator operator wages directly tied to earthwork
- Project manager salary allocated across multiple projects (Correct answer)
- Concrete saw rental for a specific cutting task
- Dump truck fuel for hauling debris
Correct answer: Project manager salary allocated across multiple projects
Indirect costs such as a project manager's salary are overhead expenses not directly tied to a single work task but spread across the project or company.
Question 7: When estimating the cost of selective demolition inside an occupied building, which factor most increases the unit cost compared to full demolition?
- Reduced equipment size and manual labor requirements due to access restrictions (Correct answer)
- Availability of recycling facilities nearby
- Lower insurance rates for partial demolition
- Warmer weather conditions
Correct answer: Reduced equipment size and manual labor requirements due to access restrictions
Selective demolition in occupied spaces requires smaller equipment, more hand labor, protective measures, and off-hours work, all of which significantly raise unit costs.
CDS Cost Estimation & Budgeting 3
What is the purpose of a 'unit price' estimate in demolition contracting?