Cost Estimating & Financial Management Flashcards
6 cards from real Construction Management practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Cost Estimating & Financial Management flashcards as text
Which level of cost estimate is typically used at the conceptual design phase and carries an accuracy range of -30% to +50%?
Answer: Order-of-magnitude estimate
An order-of-magnitude (Class 5) estimate is prepared with minimal design information and is used for feasibility screening, carrying wide accuracy ranges.
The difference between a contractor's direct costs and the project bid price is commonly referred to as:
Answer: Markup
Markup is the percentage added to direct costs to cover general overhead, profit, and contingency, resulting in the final bid price.
General overhead (sometimes called home office overhead) typically includes costs such as:
Answer: Office rent, executive salaries, and accounting staff
General overhead covers company-wide expenses not tied to a single project, such as corporate office costs, management salaries, and administrative functions.
A quantity takeoff in construction estimating refers to:
Answer: Measuring and counting all materials and work items from drawings and specs
A quantity takeoff is the systematic process of measuring, counting, and listing all quantities of work from contract documents as the foundation for pricing.
Which cost estimating method calculates costs by multiplying measured quantities by unit prices?
Answer: Unit price estimating
Unit price estimating applies a cost per unit of measure (e.g., $/CY of concrete, $/SF of drywall) to the measured quantity to arrive at a total cost.
Bid bonds on public construction projects are typically set at what percentage of the bid amount?
Answer: 5–10%
Bid bonds, which guarantee the bidder will enter the contract if awarded, are commonly required at 5–10% of the total bid price on public projects.