Construction Equipment Costs & Ownership Flashcards
7 cards from real CEC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Construction Equipment Costs & Ownership flashcards as text
Repair and maintenance costs for construction equipment are often estimated as a percentage of:
Answer: Delivered purchase price of the equipment
Industry standard practice estimates repair and maintenance costs as a percentage of the equipment's delivered purchase price over its useful life, with rates varying by equipment type and working conditions.
Which type of equipment cost is directly affected by job site conditions such as soft soil, steep grades, and high altitudes?
Answer: Operating cost (fuel and wear parts)
Difficult job site conditions increase fuel consumption, accelerate wear on tires and undercarriage, and raise repair costs — all operating cost components — while ownership costs remain largely fixed.
A contractor owns an excavator with a total O&O cost of $120 per hour. If the machine works 1,800 hours in a year, what is the annual equipment cost?
Answer: $216,000
Annual equipment cost = Hourly O&O Cost × Annual Hours = $120 × 1,800 = $216,000.
In construction estimating, which term refers to the cost of moving a piece of equipment within a job site from one work area to another?
Answer: Repositioning
Repositioning refers to moving equipment within a job site, as distinct from mobilization (bringing equipment to the site) and demobilization (removing it after work is complete).
The 'Blue Book' (Rental Rate Blue Book) is commonly used by estimators to:
Answer: Establish fair market rental rates and ownership costs for equipment
The Rental Rate Blue Book (published by EquipmentWatch) provides fair market rental rates and ownership cost data for a wide range of construction equipment, serving as an industry-standard estimating reference.
When equipment is operator-owned and furnished to a project, the estimator should apply which rate to compensate both ownership and operating costs?
Answer: The all-in or operated and maintained (O&M) rate
The all-in or O&M rate covers both ownership (depreciation, interest, insurance) and operating (fuel, maintenance, operator) costs, providing full compensation when an operator brings their own equipment.
Which of the following practices best protects an estimator's equipment cost assumptions against unexpected fuel price fluctuations during a long project?
Answer: Including a fuel price escalation clause or contingency in the estimate
A fuel price escalation clause or contingency allowance protects the contractor from unexpected price increases during extended projects, preventing cost overruns tied to volatile fuel markets.