CEC Construction Equipment Costs & Ownership 3

Question 1

Repair and maintenance costs for construction equipment are often estimated as a percentage of:

Accepted Answer

Delivered purchase price of the equipment

Answer

Annual labor cost for operators

Answer

Total project cost

Answer

Current fuel and lubricant expenditures

Question 2

Which type of equipment cost is directly affected by job site conditions such as soft soil, steep grades, and high altitudes?

Accepted Answer

Operating cost (fuel and wear parts)

Answer

Ownership cost (depreciation)

Answer

Insurance and tax costs

Answer

Equipment financing interest rate

Question 3

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?

Accepted Answer

$216,000

Answer

$120,000

Answer

$180,000

Answer

$240,000

Question 4

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?

Accepted Answer

Repositioning

Answer

Mobilization

Answer

Relocation

Answer

Demobilization

Question 5

The 'Blue Book' (Rental Rate Blue Book) is commonly used by estimators to:

Accepted Answer

Establish fair market rental rates and ownership costs for equipment

Answer

Determine union labor wage rates for equipment operators

Answer

Calculate equipment depreciation for federal tax purposes

Answer

Price specialized tools and small equipment under $10,000

Question 6

When equipment is operator-owned and furnished to a project, the estimator should apply which rate to compensate both ownership and operating costs?

Accepted Answer

The all-in or operated and maintained (O&M) rate

Answer

The bare rental rate only

Answer

The straight depreciation rate

Answer

The IRS standard mileage rate

Question 7

Which of the following practices best protects an estimator's equipment cost assumptions against unexpected fuel price fluctuations during a long project?

Accepted Answer

Including a fuel price escalation clause or contingency in the estimate

Answer

Using the lowest available fuel price at time of bid

Answer

Ignoring fuel costs since they are the owner's responsibility

Answer

Estimating fuel costs at double the current market price